Hindustan Paper Corp liquidator urged to disclose valuation of oil reserves

The employees' unions of two defunct units of Hindustan Paper Mills Corporation Ltd, for which bidders have been invited to conduct an e-auction, on Saturday urged the liquidator to disclose the valuation of the oil reserves in the Cachar Paper Mills land area.

There are more than three natural oil well reserve points in the Cachar Paper Mill Township and the land area is reportedly in a lease rent agreement with ONGC, the Joint Action Committee of Recognised Unions (JACRU) said in a recent letter to liquidator Kuldeep Verma.

The valuation of oil reserves that is termed as 'liquid gold' has "surprisingly" not been disclosed anywhere in the auction notification, and only the land area has been detailed, the letter, also addressed to the secretary of Ministry of Heavy Industries and Public Enterprises, pointed out.

It urged the liquidator to disclose the total volume of natural oil/gas available at the Cachar Paper Mills land area, the quantum of valuation of the land and the criterion adopted to fix the price.

The unions also asked Verma to clarify the period of the lease rent agreement with ONGC, and the fate of the land if the same is auctioned without adding the value of the existing oil reserves.

"As land having oil reserves is precious and a national property, we request you to disclose the details prior to selling the land to any third party," the letter said.

The issues raised require immediate intervention prior to sale of the assets, it added.

The two mills - Cachar Paper Mills at Panchgram in Hailakandi district and Nagaon Paper Mills at Jagiroad in Morigaon district - both units of HPCL - have been non- functional since October 2015 and March 2017, respectively.

Representatives of JACRU had recently met the chief minister and urged him to help revive the two units and clear dues of the employees.

In June 2018, the National Company Law Tribunal (NCLT) directed initiation of Corporate Insolvency Resolution Proceedings under the Insolvency and Bankruptcy Code (IBC), 2016 against HPCL, which had earlier submitted a Rs 1,995- crore revival proposal to the government.

However, after several rounds of meetings among all stakeholders and a number of hearings, the NCLT on April 26 this year ordered the liquidator to sell HPCL.

Accordingly, the HPCL liquidator had on June 1 issued advertisements in newspapers seeking bids for e-auction of the two units.

Days after prospective bidders showed no interest in buying the defunct mills, the liquidator had invited fresh bids on June 22 after bringing down the reserve price to Rs 969 crore from Rs 1,139 crore.

The last date for receiving bids is July 6 and the e- auction is slated to be held on July 22.