Rehabilitation package for Hindustan Organic Chemcials

New Delhi, Mar 9 (UNI) The Cabinet Committee on Economic Affairs (CCEA) today gave its approval for rehabilitation package of Hindustan Organic Chemicals Ltd on the lines suggested by the Board for Reconstruction of the Public Sector Enterprises.

Briefing newspersons on the outcome of the CCEA briefing, Information and Broadcasting Minister Priya Ranjan Dasmunsi said the package will help in turning around HOCL and contribute to GDP and by retiring high interest bonds, the company would reduce its interest burden to the tune of Rs 20 crore per year.

The following are the other details: (a) Government would provide equity of Rs 75 crore to be utilised for (1) repayment of VRS loan of Rs 31 crore availed from Bank for 685 employees (2) introduction of fresh VRS costing Rs 36 crore for estimated 590 employees and (3) Rs 8 crore towards part repayment of bonds; (b) Government would provide funds to the tune of Rs 175 crore in the form of 8 per cent bonds; (c) Waiver of penal interest and interest on interest upto March 31, 2005; and (d) continuation of Government of India Guarantee of Rs 100 crores for full term of ten years to be utilised to liquidate high cost debt.

Mr Dasmunsi said the VRS would reduce Rs 17 crore expenditure per year and restarting of caustic soda plant would generate Rs 20 crore additional income per year making the company viable for future business and growth.

UNI GS PK HT2218