February 2 date for Konark Jute sale bids

The Orissa state government is expected to open financial bids on February 2, 2005, for the sale of the state-owned Konark Jute Ltd (KJL) under a process managed through the Industrial Development Corporation Limited (IDCOL).

Sources said eight bidders have shown interest in the take-over of KJL, where the last date of receiving applications was January 27, 2005.

Sources said Kolkata's Srei Capital Markets Ltd was likely to assist in the deal.

The state would require the services of a merchant banker to prepare a valuation report on KJL along with other documentation required for evaluation of bids, besides assisting bidders with their due diligence and plant visits if required.

Srei had earlier assisted the Orissa Government in sale of state firms like S N Corporation, IDCOL Piping & Engineering Works, ABS Orissa Spinning and Orichem Ltd.

KJL was incorporated as a joint sector company with National Agricultural Co-operative Marketing Ltd (Nafed) as co-promoter.

It commissioned a composite jute mill at Dhanmandal, in Jajpur district, in 1979 but later became a subsidiary of IDCOL.

Located 70 kms from Bhubaneswar, KJL ran up a total accumulated loss of Rs 21.71 crore till March 31, 2004, besides total liabilities in excess of Rs 18 crore, gratuity liability of about Rs 5 crore and pay revision arrears of Rs 1.47 crore.

G C Pati, chairman and managing director (CMD) of IDCOL, and the secretary of the industry department of the government of Orissa, could not be contacted for his comments.

KJL is currently run by a private management group under a leave and licence arrangement which would end on March 31, 2005. KJL produces jute sacking and hessian, with a capacity of 13,240 tonnes, 3940 spindles and 212 looms.

The state had earlier proposed sale of KJL to Sanatan Commercial Ltd (SCL).

However, AAIFR recommended the winding-up of KJL and killed the proposal to hand over KJL to SCL.

The state then asked SCPL to run the mill on leave and licence basis pending a structured sale transaction.