TABLE OF CONTENTS

 

 

1.0     DISCLAIMER............................................................................................................... 3

2.0     SUBMISSION OF EXPRESSION OF INTEREST (EOI)...................................... 5

2.1     Introduction...................................................................................................... 5

2.2     Advertisement inviting EOI........................................................................ 5

2.3     Eligibility Criteria........................................................................................... 5

2.4     Format and Submission of EOI................................................................... 6

2.5     Disqualifications............................................................................................. 8

2.6     Future Process................................................................................................. 10

2.7     Enquiries.............................................................................................................. 10

2.8     Governing Laws/Jurisdiction................................................................ 10

3.0     BRIEF PROFILE OF HINDUSTAN NEWSPRINT LIMITED (HNL).............. 11

3.1     Introduction.................................................................................................... 11

3.2     Key strengths of HNL................................................................................... 11

3.3     HNL's Client Profile....................................................................................... 12

3.4     Manpower........................................................................................................... 12

3.5     Financials............................................................................................................ 13

4.0     ANNEXURES.............................................................................................................. 15

ANNEXURE –I : PUBLIC ADVERTISEMENT.............................................................. 15

ANNEXURE-II : EXPRESSION OF INTEREST............................................................. 17

ANNEXURE–III: STATEMENT OF LEGAL CAPACITY............................................ 19

ANNEXURE-IV : REQUEST FOR QUALIFICATION................................................. 20

ANNEXURE-V : GOVERNMENT CIRCULAR............................................................ 23

 

 

 

 

1.      SBI Capital Markets Ltd. (“SBICAP”) has been retained as the sole advisor by Hindustan Paper Corporation Limited (“HPC”) for the disinvestment of either 74% or 100% of the stake in its 100% subsidiary, Hindustan Newsprint Limited (“HNL” or “the Company”).

 

2.      The sole purpose of this Preliminary Information Memorandum (“PIM”) is to assist the recipient to participate in the aforesaid disinvestment process. This PIM is not intended to form the basis for any investment decision and does not constitute, either express or implied, an offer to sell or a solicitation of an offer to buy the stake in HNL. Accordingly, interested parties are advised to carry out their own due diligence, investigations and analysis of any information contained or referred to herein or made available at any stage in the disinvestment process.

 

3.      This PIM has been delivered to interested parties for information purposes only and upon the express understanding that such parties will use it only for the purpose set forth above. It does not purport to be all inclusive or contain all the information about HNL. While this document has been prepared in good faith, no representation or warranty, express or implied, is or will be made, and no responsibility or liability will be accepted by HNL, HPC, SBICAP or the Government of India (GOI) or any of their employees, advisors or agents as to or in relation to the accuracy or completeness of this document or any other oral or written information made available to any interested recipient or its advisors at any time during the disinvestment process and any liability thereof is hereby expressly disclaimed. The PIM may contain/include certain estimates, projections, statements, targets and forecasts with respect to the Company. These reflect and are based on the various assumptions made by the management, officers or employees of the Company and/or HPC and/or SBICAP, which as well as the information on which they are based may or may not be accurate. Neither of the Company, HPC or SBICAP or affiliates, subsidiaries, advisors, directors, officers or employees or agents of the Company, HPC or SBICAP make any representations and/or warranty in respect of, and no reliance should be placed on any estimates, projections, statements, targets and forecasts or the assumptions on which they may be based. The opinions in this memorandum have been expressed in good faith. Interested parties should rely on their own judgement only in assessing future business conditions and prospects of HNL. Any liability is accordingly expressly disclaimed even if any loss or damage is caused by any act or omission on part of the aforesaid, whether negligent or otherwise. 

 

4.      Neither this document nor anything contained herein shall form a basis of any contract or commitment whatsoever. Any prospective purchaser will be required to acknowledge in the purchase contract that he has not relied on or been induced to enter such agreements by any representation or warranty, save as expressly set out in such an agreement.

 

5.      Any information contained in this document will be superseded by any later written information on the same subject made available to the recipient by or on behalf of HNL, HPC or SBICAP. HNL, HPC and SBICAP undertake no obligation to provide the recipient with any additional information or update this document or to correct any inaccuracies therein which may become apparent and reserve the right, at any time and without advance notice, to change or modify the procedure or process for disinvestment, terminate the due diligence or negotiations or any part of or the entire disinvestment process prior to signing of any binding purchase agreement.

 

6.      This document has not been filed, registered or approved in any jurisdiction. Recipients of this document, particularly in jurisdictions outside India, should inform themselves of and observe any applicable legal requirements.

 

  

 

2.1         Introduction

 

1.      Hindustan Newsprint Limited (“HNL” or “the Company”) is a Government company under the administrative jurisdiction of the Department of Heavy Industry, Ministry of Heavy Industry and Public Enterprises, Government of India. The Company is selected for being accorded the Mini Ratna Category I status amongst the Central Public Sector Enterprises (PSEs). The Company is located at Newsprint Nagar in the Kottayam district of Kerala (about 65 kms from the Kochi International Airport).

 

2.      The Company went into commercial production with effect from November 01, 1982 as a unit of HPC and was later incorporated as a private limited company and a wholly owned subsidiary of the Hindustan Paper Corporation Limited (HPC) on June 7, 1983. HNL has a production capacity of 1 lakh MTPA of newsprint. HNL produces a wide range of newsprint grades of 49/45 GSM at 55%-58% ISO brightness.

 

3.      As a part of its disinvestment programme, HPC intends to divest either 74% or 100% of its stake in HNL along with transfer of management to a Strategic Investor.

  

4.      SBI Capital Markets Ltd. (SBICAP) has been retained as Advisor to HPC for the proposed disinvestment process and matters relating thereto.

 

2.2         Advertisement inviting EOI

 

An advertisement has been issued in the newspapers inviting interested parties to submit their ‘Expression of Interest’ (EOI) to participate in the disinvestment process, a copy of which is enclosed as Annexure I.

 

2.3         Eligibility Criteria

 

1.      The interested party (ies) must have:

              I.      5 years manufacturing experience in any sector OR having a Group company with 3 years paper/ paperboard/ packaging/ printing/ pulp/ newsprint manufacturing experience

AND

           II.      Net Worth (excluding revaluation reserves) of over Rs.1500 million (app.USD 31.07 mio) 

 

2.      For a consortium bid, atleast one of the members of the consortium should meet above mentioned eligibility criteria No. I and the combined Net Worth of the constituent entities of the consortium should meet the above mentioned eligibility criteria No. II to participate in the proposed transaction.

 

3.      In case of a consortium bid, the leader of the consortium should meet at least 51% of the above mentioned eligibility criterion No. II.

 

4.      Where the financial statement is expressed in currency other than Indian Rupee, the eligible amount as described above shall be computed by taking the equivalent US Dollars at the exchange rates (as stipulated by Foreign Exchange Dealers Association of India) prevailing on the date(s) of such financial statement.

 

5.      Definition

 

Net Worth = Equity Share Capital + Reserves (excluding revaluation reserves)

 

2.4         Format and Submission of EOI

 

1.      Expression of Interest may be submitted by Indian Companies, Overseas Corporate Bodies (OCBs), Foreign Companies (subject to such foreign companies obtaining all statutory approvals from GoI /FIPB/ RBI etc. by themselves), whether currently existing or to be formed specifically to participate in the disinvestment process, either individually or as a consortium (incorporated or unincorporated), for holding either 74% or 100% equity of HNL.

 

2.       The interested parties should submit, in duplicate, the ‘EOI Package’ comprising an ‘Expression of Interest’ as per Annexure II, a ‘Statement of Legal Capacity’ as per Annexure III and a ‘Request for Qualification’ (RFQ) as per Annexure IV EOI must be duly signed by authorized representative of the interested party or in case of a consortium, by the duly authorized representative of the consortium.  In addition, the Statement of Legal Capacity and RFQ will have to be submitted by the interested party and each member of the consortium. The RFQ should be duly filled in and accompanied by the following details:

 

Ø      In case of a sole bidder

§            The Audited Balance Sheet and Profit & Loss Account of the sole bidder (Indian company/OCB/Foreign company) for the last 3 financial years

§            Write-up on:

a.      Profile of the sole bidder

b.      A statement of reasons for strategic interest in HNL

c.       Any other information considered material

 

Ø      In case of a consortium bid

§            The audited Balance Sheet and the Profit & Loss Account for the last 3 financial years of the lead bidder and other member companies associated in the bid.

§            Write-up on:

a)      Lead bidder

i)          Profile of the lead bidder

ii)        A statement of reasons for strategic interest in HNL

iii)     Any other information considered material by the lead bidder

b)     Other member companies

i)          Profile of member companies in the consortium

ii)        Any other information considered material

 

3.      Any subsequent change by way of withdrawal/substitution of any member of the consortium or any change affecting the composition of the consortium may be permitted up to the stage of submission of financial bid, but only with the specific permission of HPC. HPC has the sole discretion to determine the impact of the change in membership on the structure and quality of the consortium and reject a proposal without assigning any reason whatsoever.

 

4.      The EOI Package must be in English and each copy should be bound in a separate volume.  Submission of the aforesaid documents by fax, e-mail or any other electronic means will not be acceptable.  The EOI and RFQ duly completed along with the details accompanied by a bank draft of Rs.100,000/-(USD2,071/-) drawn in favour of “Hindustan Paper Corporation Limited“ payable at Kolkata should be submitted not later than 1700 Hrs. (Indian Standard Time) on February 28, 2002 in a sealed envelope superscribed “Private and Confidential – Expression of Interest for HNL” at any of the following addresses:

 

Gyan Mohan SVP & Group Head (M&A&A)	Manish Jain AVP (M&A&A)
SBI Capital Markets Limited 202, Maker Tower “E” Cuffe Parade Mumbai – 400 005 Tel: +91 22 2184704 Fax: +91 22 2186367 Email: gyan.mohan@sbicaps.com	SBI Capital Markets Limited 202, Maker Tower “E” Cuffe Parade Mumbai – 400 005 Tel: +91 22 2184704 Fax: +91 22 2186367 Email: manish.jain@sbicaps.com

 

It is the responsibility of the interested party(ies) alone to ensure that its EOI Package with required documents is delivered at the above mentioned address by the stated time and date. HNL/HPC/SBICAP shall not be responsible for non-receipt of correspondence.

 

2.5         Disqualifications

 

1.      HPC/SBICAP shall not consider for the purpose of qualification, the EOI which has been found to be incomplete in content or attachments or authenticity.

 

2.      Without prejudice to any other rights or remedies available to HPC/SBICAP, a company/consortium may be disqualified and its EOI dropped from further consideration for any of the reasons listed below:

 

Ø      Material misrepresentation by such company/member of consortium in the EOI and/or RFQ or otherwise.

 

Ø      Failure by such company/consortium to provide the information required to be provided in the EOI and RFQ, and

 

Ø      Submission of EOI and RFQ in respect of any company/ consortium, where such company or member had already submitted an EOI or is a member of a consortium, which has already submitted an EOI and the earlier EOI has not been withdrawn.

           

3.      If any information becomes known after the interested party has been qualified to receive the information memorandum which would have entitled HPC/SBICAP to reject or disqualify the relevant company/consortium, HPC/SBICAP reserves the right to reject the interested party at the time or at any time after such information becomes known to HPC/SBICAP. 

 

4.      Further, Government of India issued guidelines for disqualification of bidders seeking to acquire any public sector enterprises through the process of disinvestment vide Department of Disinvestment OM No.6/4/2001-DD-II dated 13th July 2001*, a copy of which is enclosed as Annexure-V.  Entities interested in participating in the proposed disinvestment should not have been convicted by a Court of Law or indicted/ have any adverse order passed against them by any court of law, or any other regulatory authority in any matter involving a grave offence and/or which casts a doubt on their ability to manage HNL. Further, such persons or companies entities and/ or their sister concern(s) should not have any charge sheet against them by any agency of the GoI or any court of law, which involves a matter concerning the security and integrity of India. The final decision in this regard would be taken by the GoI. The GoI, vide its circular F.NO.4/95/2000-DD (Vol.V), has clarified regarding which offence can be treated as a “grave offence” as under:

 

a.      Only those orders of SEBI are to be treated as coming under the category of “grave offences” which directly relate to “fraud” as defined in the SEBI Act and /or regulations.

b.      Only those orders of SEBI that cast a doubt on the ability of the bidder to manage the public sector unit when it is disinvested, are to be treated as adverse.

c.       Any conviction by Court of Law.

d.     In cases in which SEBI also passes a prosecution order, disqualification of the bidder should arise only on conviction by the Court of Law.

 

The interested party(ies) are required to read the guidelines and satisfy themselves that they are qualified to bid for the stake in HNL through the process of disinvestment and give an undertaking to the effect that they are qualified to bid for the stake in HNL in the EOI to be submitted by them.  Further, interested parties would be required to provide the information on the criteria, laid down in the guidelines of 13.7.2001 along with their EOI.  The bidders shall be required to provide with their EOI an undertaking to the effect that no investigation by a regulatory authority is pending against them.  In case any investigation is pending against the concern or its sister concern or against its CEO or any of its Directors/Managers/employees, full details of such investigation including the name of the investigating agency, the charge/offence for which the investigation has been launched, name and designation of persons against whom the investigation has been launched and other relevant information should be disclosed, to the satisfaction of the Government. For other criteria also regarding the matters concerning the security and integrity of India, a similar undertaking shall be provided along with EOI.

 

*These guidelines are under revision and would be available on the website www.divest.nic.in shortly. The interested party(ies) are requested to keep a close watch on the revised guidelines as the same would be applicable to them.

 

5.      Where the interested party is a consortium, HPC may disqualify the entire consortium for any of the reasons specified in paragraph numbers 2.5(1), 2.5(2), 2.5(3) and 2.5(4), even if it applied to only one member of the consortium.

 

6.      The companies/consortia not satisfying the eligibility and requisite qualification criteria specified in the above sections are not eligible.

 

7.      The PIM along with its enclosures does not constitute a commitment on the part of HNL/HPC/SBICAP other than to provide further information on HNL. Furthermore, this document confers neither the right nor an expectation on any party to participate in the proposed disinvestment process. The HPC/SBICAP reserve the right to withdraw from the process or any part thereof or vary any terms at any time without assigning any reasons. The HPC reserves the right to accept or reject any /all offer(s) without assigning any reasons.

 

2.6         Future Process

 

1.      The EOI submitted by interested parties shall be evaluated on the basis of the criteria specified elsewhere in this document.  If at any time during the evaluation process, HPC/SBICAP require any clarification, it reserves the right to request such information from any or all of the companies/consortia and the companies/consortia will be obliged to provide the same within reasonable time frame.

 

2.      Based on an evaluation of EOIs received, interested parties, which are deemed fit (“qualified interested parties” “QIP”), will be qualified to participate in the subsequent selection process (without conferring any right or expectation whatsoever to QIP).  QIP will be provided with the Confidential Information Memorandum (CIM) and shall be invited to participate further in the process described in detail in the CIM.  QIP will get an opportunity to conduct due diligence and take up site visits and will also have access to data rooms and hold discussions with the management of HNL/HPC/officials of Ministry of Heavy Industry & Public Enterprises / Ministry of Disinvestment, Government of India.  The rules regarding access to information in the data rooms will be provided to QIPs later.  QIPs will be invited to submit their proposal and a binding price bid.

 

2.7         Enquiries

 

HPC/SBICAP reserve the right not to respond to question raised or provide clarifications sought, in their sole discretion, if it is considered that it would be inappropriate to do so. Nothing in this document shall be taken or read as compelling or requiring HPC/SBICAP to respond to any question or to provide any clarification. No extension of any time and date referred to in this PIM shall be granted on the basis or grounds that HPC/SBICAP has not responded to any question/ provided any clarification.

 

2.8         Governing Laws/Jurisdiction

           

The laws of Union of India shall govern all matters relating to the disinvestment process and the bidding procedure.  Only Courts at New Delhi (with exclusion of all other Courts) shall have the jurisdiction to decide or adjudicate on any matter, which may arise out of or in connection with the disinvestment process and the bidding procedure.

 

 

3.1         Introduction*

 

1.      Hindustan Newsprint Limited (“HNL” or “the Company”) is a Government company under the administrative jurisdiction of the Department of Heavy Industry, Ministry of Heavy Industry and Public Enterprises, Government of India. The Company is selected for being accorded the Mini Ratna Category I status amongst the Central Public Sector Enterprises (PSEs). 

 

2.      The Company was incorporated as a private limited company and a wholly owned subsidiary of the Hindustan Paper Corporation limited (HPC) on June 7, 1983 with the main objective of taking over and acquiring the business of Kerala Newsprint Project, a unit of Hindustan Paper Corporation Ltd, on a going concern basis in accordance with the directive of Government of India.

 

3.      HNL is one of the largest newsprint manufacturer of India with an installed capacity of 100,000 tones per annum (tpa) and a demonstrated capacity of 105,000 tpa. HNL produces a wide range of newsprint grades of 49/45 GSM at 55%-58% ISO brightness.

 

4.      The manufacturing unit and the registered office of the Company are located at Newsprint Nagar in the Kottayam district of Kerala (about 65 kms from the Kochi International Airport).

 

5.      HNL is the first newsprint manufacturing company in India to possess both ISO 9002 certification for its Quality Management System as well as ISO14001 certification for its Environment Management System (for the Company as well the Township).

 

*More information on the Company can be accessed from its web-site www.hnlonline.com.

 

3.2         Key strengths of HNL

 

The key strengths of HNL include:

 

Ø      One of the largest newsprint manufacturers in the country, manufacturing and marketing quality newsprint since 1982.

 

Ø      Strategically located with close proximity to Kochi port as well as a broad gauge railway station.

 

Ø      First Indian company to export newsprint in 1996 and possesses potential for exports owning to its strategic location.

 

Ø      Diversified raw material sources comprising subsidized wood from Govt. of Kerala, Captive Plantations, Farm Forestry Scheme and Purchase at Gate Scheme

 

Ø      Sources its water requirements from a perennial river at nominal costs.

 

Ø      Meeting all environment related norms and possesses ISO14001 certification for its Environment Management System (for the Company as well the Township)

 

Ø      Product meets quality requirements of all big newspapers in India and the Company possesses ISO 9002 certification for its Quality Management System.

 

Ø      Operated at more than 100% capacity utilization for 2 out of the last three years with 104% capacity utilization in 2000-2001 as against the industry average of less than 60% (Source: CRIS-INFAC).

 

Ø      Technologically advanced management and production systems with the installation of an Enterprise Resource Planning (ERP) system for improved synergies in operations and other systems in an advance stage.

 

Ø      A profit making and a dividend paying Company for the last 10 years and the net-worth of the Company (excluding capital reserve) as on March 31, 2001 stood at Rs.2,166.1million (approx. USD44.87million).

 

Ø      Rich pool of skilled and experienced manpower

 

Ø      Cordial industrial relations with no Company specific closure on account of labour unrest in its history of operations.

 

3.3         HNL's Client Profile

 

In India, the clients of HNL include all major newspaper publishing houses like Malayala Manorama, Ennadu, Deccan Chorincle, The Hindu, The New Indian Express etc. in South India and other dailies like Gujarat Samachar, The Statesman, The Tribune etc.

 

3.4         Manpower

 

HNL has a rich pool of qualified and experienced managerial and technical personnel with total staff strength of 1286 permanent employees, out of which 953 employees (i.e. 74% of the total manpower) are technical staff. 

 

The Company has successfully completed a Voluntary Retirement Scheme on December 31, 2001 which was availed of by 139 employees.

 

3.5         Financials

 

Equity base

 

The paid-up share capital of HNL stands at Rs.825.4 million (approx. USD17.10 million) comprising 8,25,399 equity shares of face value of Rs.1000 each held entirely by HPC and its nominees.

 

Profitability

 

HNL has been a profitable company since 1988-89 and has also been paying dividend since 1991-92. The Company registered a profit after tax (PAT) of Rs.162 million (approx. USD3.36 million) on a total income of Rs.2,666 million (approx. USD55.21 million) for the year ended March 31, 2001.

 

The Operating Profit Margin of the Company stood at 15.44% for FY2001 and the net-worth of the Company (excluding capital reserve) as on March 31, 2001 was Rs.2,166 million (approx. USD44.87 million).

 

A snapshot of the performance HNL for the last ten years is given below:

 

(All figures in Rs. million unless specified otherwise)

	FY92	FY93	FY94	FY95	FY96	FY97	FY98	FY99	FY00	FY01
OPERATING RESULTS
Production (MT)	90,181	97,015	98,600	105,369	101,111	70,287	85,038	105,570	91,004	104,004
Sales (MT)	90,093	93,987	96,041	110,126	100,009	63,972	92,022	95,220	100,682	103,923
Sales Turnover	1,478	1,639	1,759	2,176	2,692	1,419	1,897	2,211	2,125	2,534
Value of Production	1,481	1,676	1,797	2,113	2,712	1,547	1,764	2,389	1,958	2,540
Other Income	17	13	18	22	23	23	19	27	26	35
Materials	793	988	1,086	1,255	1,417	1,041	1,199	1,490	1,355	1,759
Employees' Remuneration & Benefits	103	126	136	155	176	189	239	280	303	346
Depreciation	100	32	41	70	77	83	86	93	89	81
Interest (Net)	(19)	3	29	26	(40)	(3)	(14)	(37)	(44)	(81)
Manufacturing & Other Expenses incl. Write-off & Prior Period adj.	141	142	147	184	201	181	220	344	208	167
Profit before Tax (PBT)	380	398	376	444	904	79	53	246	72	304
Provision for Tax	235	203	151	65	391	35	29	35	40	142
Profit after Tax (PAT)	145	195	225	379	513	43	24	211	32	162
Dividend	165	124	83	83	124	17	17	45	8	83
Dividend (%)	20%	15%	10%	10%	15%	2%	2%	5.50%	1%	10%
Tax on Dividend	-	-	-	-	-	17	17	45	18	84
FINANCIAL RESULTS
Equity Capital	825	825	825	825	825	825	825	825	825	825
Long Term Loan including Interest Accrued and Due	7	3	251	27	26	25	34	33	32	20
Gross Block	1,656	1,717	2,085	2,289	2,431	2,520	2,549	2,744	2,699	2,720
Cumulative Depreciation & Goodwill Written-off	1,112	1,144	1,182	1,263	1,336	1,418	1,503	1,594	1,641	1,731
Inventories	387	520	444	484	546	703	488	717	518	652
Debtors	92	71	227	14	189	107	100	61	110	91
Working Capital	434	213	449	463	557	767	763	1,006	1,138	1,216
Capital Employed	978	785	1,353	1,490	1,651	1,870	1,809	2,156	2,195	2,204
Net Worth	984	1,056	1,198	1,494	1,882	1,907	1,913	2,073	2,095	2,166
OTHER STATISTICS
Number of Employees	1,696	1,697	1,699	1,654	1,629	1,589	1,555	1,533	1,501	1,455

 

 

(All figures in USD million unless specified otherwise) Conversion Rate: USD I= Rs.48.28

	FY92	FY93	FY94	FY95	FY96	FY97	FY98	FY99	FY00	FY01
OPERATING RESULTS
Production (MT)	90,181	97,015	98,600	105,369	101,111	70,287	85,038	105,570	91,004	104,004
Sales (MT)	90,093	93,987	96,041	110,126	100,009	63,972	92,022	95,220	100,682	103,923
Sales Turnover	30.61	33.95	36.43	45.07	55.76	29.40	39.30	45.79	44.01	52.48
Value of Production	30.67	34.72	37.22	43.76	56.17	32.05	36.54	49.47	40.55	52.61
Other Income	0.35	0.27	0.36	0.45	0.47	0.48	0.40	0.57	0.53	0.72
Materials	16.42	20.46	22.50	25.99	29.35	21.57	24.84	30.86	28.07	36.43
Employees' Remuneration & Benefits	2.13	2.60	2.81	3.22	3.65	3.91	4.95	5.80	6.28	7.16
Depreciation	2.07	0.66	0.85	1.45	1.59	1.73	1.78	1.92	1.85	1.67
Interest (Net)	(0.38)	0.06	0.60	0.54	(0.83)	(0.06)	(0.28)	(0.77)	(0.91)	(1.67)
Manufacturing & Other Expenses incl. Write-off & Prior Period adj.	2.91	2.95	3.05	3.81	4.16	3.76	4.57	7.13	4.30	3.46
Profit before Tax (PBT)	7.87	8.25	7.79	9.19	18.71	1.63	1.09	5.10	1.49	6.29
Provision for Tax	4.87	4.21	3.13	1.34	8.10	0.73	0.60	0.73	0.84	2.93
Profit after Tax (PAT)	3.00	4.04	4.66	7.85	10.62	0.89	0.49	4.37	0.66	3.36
Dividend	3.42	2.56	1.71	1.71	2.56	0.34	0.34	0.94	0.17	1.71
Dividend (%)	20%	15%	10%	10%	15%	2%	2%	6%	1%	10%
Tax on Dividend	-	-	-	-	-	0.35	0.35	0.93	0.37	1.74
FINANCIAL RESULTS
Equity Capital	17.10	17.10	17.10	17.10	17.10	17.10	17.10	17.10	17.10	17.10
Long Term Loan including Interest Accrued and Due	0.14	0.07	5.21	0.55	0.54	0.52	0.71	0.68	0.65	0.42
Gross Block	34.29	35.56	43.19	47.41	50.35	52.20	52.79	56.84	55.89	56.33
Cumulative Depreciation & Goodwill Written-off	23.03	23.70	24.47	26.15	27.68	29.36	31.12	33.02	34.00	35.86
Inventories	8.02	10.77	9.19	10.03	11.31	14.55	10.11	14.85	10.72	13.51
Debtors	1.90	1.46	4.70	0.29	3.91	2.22	2.07	1.25	2.28	1.88
Working Capital	8.99	4.40	9.31	9.59	11.53	15.88	15.80	20.83	23.56	25.18
Capital Employed	20.25	16.26	28.02	30.86	34.20	38.72	37.46	44.65	45.46	45.65
Net Worth	20.38	21.86	24.82	30.95	38.98	39.50	39.61	42.95	43.39	44.87
OTHER STATISTICS
Number of Employees	1,696	1,697	1,699	1,654	1,629	1,589	1,555	1,533	1,501	1,455

 

 

 

ANNEXURE –I : PUBLIC ADVERTISEMENT

 

 

 

GLOBAL  INVITATION OF EXPRESSIONS OF INTEREST

FOR DISINVESTMENT OF 74% OR 100% STAKE IN

HINDUSTAN NEWSPRINT LTD. (HNL), A WHOLLY OWNED SUBSIDIARY

 

This announcement is neither a prospectus nor an offer/invitation to the public for sale of shares, securities or debentures to the public.

 

HNL is engaged in manufacturing and marketing of newsprint. The Company has its manufacturing facilities at Newsprint Nagar, Kottayam, Kerala with a total installed capacity of 1 lakh tonnes per annum (tpa). The unit has been ISO 9002 as well as ISO 14001 accredited. For the financial year ended March 31, 2001, HNL had a Profit After Tax of Rs.161.99 million (app. USD 3.36mio) on a total turnover of Rs 2665.69 million (app. USD 55.21 mio). The net worth of HNL as at March 31, 2001 was Rs.2167.20 million (app. USD 44.89 mio). Further details on HNL can be accessed at the Company's website http://www.hnlonline.com.

 

SBI Capital Markets Ltd. (SBICAP), has been retained as the Advisor to Hindustan Paper Corporation Ltd. (HPC) for the proposed disinvestment. SBICAP invites Expressions of Interest (EOIs) from interested parties for 74% or 100% stake in HNL.

 

Eligibility Criteria

 

Indian Companies, Overseas Corporate Bodies (OCBs), Foreign Companies (subject to such foreign companies obtaining all statutory approvals from GoI /FIPB/ RBI etc. by themselves) must have:

I.        5 years manufacturing experience in any sector OR having a Group company with 3 years paper/ paperboard/ packaging/ printing/ pulp/ newsprint manufacturing experience

AND

II.     Net worth (excluding revaluation reserves) of over Rs.1500 million (app.USD 31.07 mio) 

 

For a consortium (incorporated or unincorporated), at least one of the members of the consortium should meet above mentioned eligibility criterion no. I and the combined net worth of the constituent entities of the consortium should meet the above mentioned eligibility criterion no. II. Also the leader of the consortium should meet at least 51% of the above mentioned eligibility criterion No. II.

 

Entities interested in participating in the proposed disinvestment should not have been convicted  by a Court of Law or indicted/ have any adverse order passed against them by  any other regulatory authority in any matter involving a grave offence and/or which casts a doubt on their ability to manage HNL. Further, such entities and/ or their sister concern(s) should not have any charge sheet against them by any agency of the GoI or any court of law, which involves a matter concerning the security and integrity of India. The final decision in this regard would be taken by the GoI. Interested party(ies) may refer to the Department of Disinvestment Office Memorandum No.6/4/2001-DD-II dated July 13, 2001, a copy of which is enclosed in the PIM, for further details.

 

How to Apply

 

Interested Parties are requested to submit their EOI along with a Request for Qualification (RFQ) in the prescribed format specified in the Preliminary Information Memorandum (PIM) at the under-mentioned addresses, not later than 1700 hrs (IST) on February 28, 2002 along with a bank draft of Rs.1,00,000/- (USD 2071/-) drawn in favour of Hindustan Paper Corporation Limited payable at Kolkata.  The PIM can be obtained either from the under-mentioned persons or accessed at www.hindpaper.com. or www.divest.nic.in or www.dhi.nic.in or www.sbicaps.com. All queries related to the EOI may be addressed to the under-mentioned persons.

Gyan Mohan Senior Vice President & Group Head M&A& Advisory SBI Capital Markets Ltd. 202, Maker Tower 'E' Cuffe Parade Mumbai 400 005   Phone: 91-22-2187279/ 2189166 Fax    : 91-22-2186367 Email : gyan.mohan@sbicaps.com

Manish Jain Asst. Vice President M&A&Advisory SBI Capital Markets Ltd. 202, Maker Tower 'E' Cuffe Parade Mumbai 400 005   Phone: 91-22-2184704/ 2189166 Fax    : 91-22-2186367 Email : manish.jain@sbicaps.com

 

This advertisement does not constitute, and will not be deemed to constitute, any commitment on the part HPC or HNL or SBICAP; it has been provided only by way of information on HNL. Furthermore, this advertisement confers neither the right nor an expectation on any party to participate in the proposed disinvestment.  HPC or SBICAP reserve the right to withdraw from the process or any part thereof, to accept or reject any or all offers at any stage of the process and/or modify the process or any part thereof or to vary terms at any time without assigning any reason whatsoever. No financial obligation will accrue to HPC or SBICAP in such an event. Further, HPC or SBICAP or HNL shall not be responsible for non-receipt of correspondence sent by post/courier/e-mail/fax.

 

ANNEXURE-II : EXPRESSION OF INTEREST

 

(To be forwarded on the letterhead of the interested party/lead

bidder/member of the consortium submitting the EOI)

 

Reference No.______________                                                        Date ___________

 

The SVP & Group Head (M&A&A)

SBI Capital Markets Limited

202, Maker Tower “E”

Cuffe Parade

Mumbai – 400 005

 

Sub: GLOBAL  INVITATION OF EXPRESSIONS OF INTEREST

FOR DISINVESTMENT OF 74% OR 100% STAKE IN

HINDUSTAN NEWSPRINT LTD. (HNL), A WHOLLY OWNED SUBSIDIARY 

 

Sir,

 

This is with reference to the advertisement dated ________ inviting Expression of Interest for Hindustan Newsprint Limited (HNL).

 

As specified in the advertisement, we have read and understood the contents of the Preliminary Information Memorandum (PIM) and are desirous of participating in the above disinvestment process, and for this purpose:

 

 

We have formed/propose to form a consortium comprising of ____members as follows:

 

1.         ____________________________ (Insert company name)

2.         ____________________________ (Insert company name)

3.         ____________________________ (Insert company name)

 

 

1.      Only 74  % equity stake of HNL

2.      Only 100% equity stake of HNL

3.     For both 74% and 100% stake of HNL

 

We believe that we/our consortium/proposed consortium satisfies the eligibility criteria set out in relevant sections of the PIM including the guidelines for qualification of bidders seeking to acquire stakes in Public Sector Enterprises through the process of disinvestment issued by the Government of India vide Department of Disinvestment OM No.6/4/2001-DD-II dated 13^th July 2001 and subsequent amendments/clarifications thereto.

 

We certify that in regard to matters other than security and integrity of the country, we have not been convicted by a Court of law or indicted or adverse orders passed by a regulatory authority which would cast a doubt on our ability to manage the public sector unit when it is disinvested or which relates to a grave offence that outrages the moral sense of the community.

 

We further certify that in regard to matters relating to security and integrity of the country, we have not been charge-sheeted by any agency of the Government or convicted by a Court of Law for any offence committed by us or by any of our sister concerns.

 

We further certify that no investigation by a regulatory authority is pending either against us or against our sister concerns or against our CEO or any of our Directors/Managers/ employees.

 

We undertake that in case due to any change in facts or circumstances during the pendency of the disinvestment process, we are attracted by the provisions of disqualification in terms of the subject guidelines, we would intimate the HPC of the same immediately.

 

The Statement of Legal Capacity and Request for Qualification as per formats indicated hereinafter, duly signed by us/respective members, who jointly satisfy the eligibility criteria, are enclosed.

 

We shall be glad to receive further communication on the subject.

 

Yours faithfully,

 

 

Authorised Signatory

                                                            For and on behalf of the party/consortium

 

Enclosure:

1. Statement of Legal Capacity

2. Request for Qualification 

 

ANNEXURE–III: STATEMENT OF LEGAL CAPACITY

(To be forwarded on the letterhead of the interested party / each member of the consortium submitting the EOI).

Reference No.______________                                                        Date ___________

 

The SVP & Group Head (M&A&A)

SBI Capital Markets Limited

202, Maker Tower “E”

Cuffe Parade

Mumbai – 400 005

 

Sub: GLOBAL  INVITATION OF EXPRESSIONS OF INTEREST

FOR DISINVESTMENT OF 74% OR 100% STAKE IN

HINDUSTAN NEWSPRINT LTD. (HNL), A WHOLLY OWNED SUBSIDIARY

 

Sir,

 This is with reference to the advertisement dated ________ inviting Expression of Interest for Hindustan Newsprint Limited (HNL).

 

We have read and understood the contents of the PIM and the advertisement and pursuant to this hereby confirm that:

 

We satisfy the eligibility criteria laid out in the PIM and the advertisement.

 

We are a member of the consortium (constitution of which has been described in the Expression of Interest) which jointly satisfies the eligibility criteria as detailed in the PIM.*

 

We have agreed that ________(insert member’s name) will act as the lead member of our consortium.*

 

We have agreed that ______________(insert individual’s name) will act as our representative on our behalf and has been duly authorized to submit the EOI. Further, the authorized signatory is vested with requisite powers to furnish such letter and Request for Qualification and authenticate the same.*

 

We have agreed that (insert the name of the individual) chosen as representative of our consortium and on our behalf and has been duly authorized to submit the EOI.  Further, the authorized signatory is vested with requisite powers to furnish such letter and Request for Qualification and authenticate the same.*

 Yours faithfully,

 

Authorised Signatory

 For and on behalf of (party/member)

*Strike off whichever clause is not applicable

 

ANNEXURE-IV : REQUEST FOR QUALIFICATION

 

(To be submitted in respect of interested party/each member of the consortium)

 

 

Name of the interested Party(ies)/Member(s) ___________________________

 

1.      Constitution (Tick, wherever applicable) 

i)                   Public Limited Company
ii)                 Private Limited Company
iii)              Others, if any (Please specify)

 

§         If the interested party is a foreign company/ OCB, specify list of statutory approvals from GoI/ RBI/ FIPB applied for/ obtained/ awaiting:

 

 

2.      Sector (Tick, wherever applicable)

 

i)                   Public Sector
ii)                 Joint Sector
iii)              Others, If any (Please specify)

 

3.      Details of Shareholding
4.      Role/ Interest of each Member in the Consortium (if applicable)
5.      Nature of business/products dealt with	:
6.      Date & Place of incorporation	:
7.      Date of commencement of business	:
8.      Full address including phone No./fax No.	:
i)                   Registered Office	:
ii)                 Head Office	:
9.      Address for correspondence	:

 

10.  Basis of eligibility for participation in the process (Please mention details of your eligibility) as under (whichever is applicable):

 

(a)   Brief description of manufacturing operations engaged in any sector by the interested party

(Please furnish necessary proof for manufacturing experience of 5 years or more in any sector)

OR

(b)   Details of paper/ paperboard/ printing/ pulp/ newsprint manufacturing experience, if any.

(Please furnish necessary details of self/ Group Company with paper/ paperboard/ printing/ pulp/ newsprint manufacturing experience of 3 years or more)

 

11.  Please attach most recent Audited Statement of Accounts/Annual Report. Please provide a chartered account/auditor certificate certifying the Net Worth.

 

12.  Please provide details of all contingent liabilities that, if materialized, that have or would reasonably be expected to have a material adverse affect on the business, operations (or results of operations), assets, liabilities and/or financial condition of the Company, or other similar business combination or transaction.

 

13.  Contact Person(s):

i)                   Name:

ii)                 Designation:

iii)              Phone No.:

iv)               Mobile No.:

v)                 Fax No.:

vi)               Email:

 Yours faithfully,

 

 

Authorised Signatory For and on behalf of the (party/member)

Authorised Signatory For and on behalf of the consortium

 

Place :

Date :

 

Note: Please follow the order adopted in the Format provided.  If the interested party is unable to respond to a particular question/ request, the relevant number must be nonetheless be set out with the words “ No response given” against it.  

 

ANNEXURE-V : GOVERNMENT CIRCULAR

 

No. 6/4/2001-DD-II

Government of India

Ministry of Disinvestment

Block 14, CGO Complex

New Delhi.

Dated 13^th July, 2001.

 

 

OFFICE MEMORANDUM

 

Sub:    Guidelines for qualification of Bidders seeking to acquire stakes in Public Sector Enterprises through the process of disinvestment

 

Government has examined the issue of framing comprehensive and transparent guidelines defining the criteria for bidders interested in PSE-disinvestment so that the parties selected through competitive bidding could inspire public confidence.  Earlier, criteria like net worth, experience etc. used to be prescribed.  Based on experience and in consultation with concerned departments, Government has decided to prescribe the following additional criteria for the qualification / disqualification of the parties seeking to acquire stakes in public sector enterprises through disinvestment:

 

(a)   In regard to matters other than the security and integrity of the country, any conviction by a Court of Law or indictment / adverse order by a regulatory authority that casts a doubt on the ability of the bidder to manage the public sector unit when it is disinvested, or which relates to a grave offence would constitute disqualification.  Grave offence is defined to be of such a nature that it outrages the moral sense of the community.  The decision in regard to the nature of the offence would be taken on case to case basis after considering the facts of the case and relevant legal principles, by the Government.

 

(b)   In regard to matters relating to the security and integrity of the country, any charge-sheet by an agency of the Government / conviction by a Court of Law for an offence committed by the bidding party or by any sister concern of the bidding party would result in disqualification.  The decision in regard to the relationship between the sister concerns would be taken, based on the relevant facts and after examining whether the two concerns are substantially controlled by the same person/persons.

 

(c)    In both (a) and (b), disqualification shall continue for a period that Government deems appropriate.

 

(d)  Any entity, which is disqualified from participating in the disinvestment process, would not be allowed to remain associated with it or get associated merely because it has preferred an appeal against the order based on which it has been disqualified.  The mere pendency of appeal will have no effect on the disqualification.

 

(e)   The disqualification criteria would come into effect immediately and would apply to all bidders for various disinvestment transactions, which have not been completed as yet.

 

(f)     Before disqualifying a concern, a Show Cause Notice why it should not be disqualified would be issued to it and it would be given an opportunity to explain its position.

 

(g)   Henceforth, these criteria will be prescribed in the advertisements seeking Expression of Interest (EOI) from the interested parties. The interested parties would be required to provide the information on the above criteria, along with their Expressions of Interest (EOI).  The bidders shall be required to provide with their EOI an undertaking to the effect that no investigation by a regulatory authority is pending against them.  In case any investigation is pending against the concern or its sister concern or against its CEO or any of its Directors/Managers/employees, full details of such investigation including the name of the investigating agency, the charge/offence for which the investigation has been launched, name and designation of persons against whom the investigation has been launched and other relevant information should be disclosed, to the satisfaction of the Government.  For other criteria also, a similar undertaking shall be obtained along with EOI.

 

 

-sd/-

(A.K. Tewari)

Under Secretary to the Government of India.

 

To

As per list attached.