HPC gets Cabinet nod for subsidiary

New Delhi: Hindustan Paper Corporation Ltd (HPC), a Kolkata based Central sector enterprise, has received the Cabinet nod to form a subsidiary to set up a new paper mill.

The subsidiary to be set up at Jagdishpur, Uttar Pradesh, will be at an estimated cost of Rs 2,742 crore (constant cost basis) and Rs 3,241 crore (completion cost basis). The subsidiary company will have a 51 per cent holding by HPC and will raise the balance 49 per cent from the capital market through an initial public offer.

The Union Cabinet also granted the approval to HPC for a loan of Rs 255 crore enabling the company to subscribe by way of promoters’ 51 per cent contribution equity as well as create the post of a full-time Managing Director for the new subsidiary company.

The Government also approved the setting up of a special purpose vehicle in the form of a co-operative society under the Multi-State Cooperative Societies Act, 1984 for carrying out farm forestry activities for ensuring sustained raw material availability for the project.

The new subsidiary company will venture into value added segment of paper, which will enable the company to cover the entire spectrum of publication-printing and writing papers.