Mysore Paper Mills approaches BIFR for bailout

BANGALORE: The state-owned Mysore Paper Mills Ltd (MPM), which recorded a revenue loss of over Rs 270 crore against its net worth of about Rs 124 crore, has approached the Board for Industrial and Financial Reconstruction (BIFR) seeking rehabilitation.According to official sources, a decision to this effect was taken at MPM’s board meeting chaired by Chairman Araga Jnanendra and MD P K Garg on Monday. MPM with its plant at Bhadravathi was in bad shape due to use of old machinery and the lack of modernisation of the unit. It also has a sugar mill with cogeneration facility.According to sources, the periodical infusion of equity from the state kept the company rolling till date. “The decision to approach BIFR was also to support over 4,000 employees,” they said.MPM had trouble in procuring additional working capital loans from banks. MPM was founded by Krishnaraja Wodeyar, the erstwhile Maharaja of Mysore, and came under the control of the state in 1977.The state holds 65 per cent equity in the company while 18 per cent stake is held by financial institutions and 17 per cent by the public. The company has a Rs 450-crore modernisation plan. It is also working on a plan to set up 200 TPD de-inking plant at a cost of Rs 100 crore.The MPM board also reportedly approved to raise Rs 50 crore through the issue of taxable, unsecured and redeemable bonds on private placement, sources added.