Hind Newsprint may tap market early next year

Hindustan Newsprint Ltd, the wholly owned subsidiary of public sector Hindustan Paper Corporation, could tap the capital market early next year to part finance its expansion plan.

The chairman and managing director of HPC disclosed this here at a press conference for announcing the annual results of HNL and HPC.

HNL has posted a net profit of Rs 5.5 crore in the financial year 2004-05 over a turnover of Rs 273.94 crore compared to Rs 5.03 crore in 2003-04 over a turnover of Rs 252.68 crore.

The HPC CMD informed that it has appointed reputed global consultant Jaycopuori for preparing a detailed feasibility report for the proposed expansion and diversification plan of Hindustan Newsprint, which is one of the biggest newsprint company in the counttry.

According to him, the Union government will invest around Rs 640 crore in HNL in a period of three years between 2005 and 2008.

"Out of Rs 640 crore, around Rs 340 crore will come from internal accruals and borrowings. The rest Rs 300 crore could come from initial public offering," he said.

However, Philip maintained that IPO is only one of the 2-3 options they are currently toying with.

He indicated that the company will take a final decision on IPO after getting the DPR from the global consultant.

"HPC is likely to get the report by the middle of May. The company will take a final decision on this only after that," he added.

The HPC CMD also made it clear that HPC will continue to hold majority stake in HNL even after IPO.

"HPC is out of disinvestment list so there is no question of divesting majority stake," the HPC CMD said.

Philip said HNL currently had a production capacity of 1 lakh ton and capacity utilisation ratio is more than 100 per cent.

"Plans on the anvil to double the installed capacity with flexibility for producing finer grade of writing and printing paper," he said.