SHIVAMOGGA: The state government is exploring the possibility of restarting the Mysore Paper Mills (MPM) in Bhadravathi through private participation. As part of these steps, MPM has engaged the services of Infrastructure Development Corporation (Karnataka) Ltd (iDeCK), a Bengaluru-based consultancy, as its transaction advisor.
Large and Medium Industries Minister M B Patil, replying to an unstarred question from Bhadravathi MLA B K Sangameshwara in the Legislative Assembly recently, said the government had concluded that reviving the factory on its own was not viable. Instead, efforts were being made to lease the mill to private bidders, with exemptions and relief measures under consideration to make the proposal attractive.
"Prospective bidders have shown interest in operating the factory, provided they are granted exemption to grow eucalyptus and are free from liabilities. The government is taking steps in this direction as per rules, and the factory can be restarted once the process is finalised," Patil said.
As part of these steps, MPM has engaged the services of iDeCK as its transaction advisor. The firm will steer the process of leasing out the mill’s operations to a private entity, including bid preparation, evaluation and finalisation of agreements.
The minister noted that tenders had been floated several times since 2017, but no bids were received. A renewed push began subsequently, with meetings chaired by the industries minister in September 2023 and the chief secretary in November 2023. The discussions included a proposal to waive dues owed to KPTCL and MESCOM, though the Energy Department later refused to write off the principal and interest. Talks are also under way with the Finance Department to resolve pending loans.
On land and machinery, Patil said MPM still holds 750 acres in Bhadravathi, where the factory, staff quarters, schools and public utilities stand. He clarified that most machinery remains intact inside protected buildings, while only iron structures exposed to the elements have deteriorated.
The government formally approved the closure of MPM in October 2021, terminating the services of 202 employees with compensation. The High Court has since directed that other displaced workers be accommodated in state-run boards and corporations.
Once a flagship industry of Shivamogga district, the mill employed nearly 5,000 people directly and thousands more indirectly before paper production stopped in 2015 and sugar operations in 2016.
Patil’s statement in the Assembly signals that while the state has abandoned hopes of reviving MPM as a public sector unit, it is keeping the door open for a fresh lease of life through private investment.
Meanwhile, the Mysore Paper Mills Ltd informed BSE Ltd that it has delayed filing its unaudited financial results for the first quarter of FY 2025-26. The company, which halted operations in 2021 and now limits activities to forestry plantations, said the provisional results are under preparation and will be submitted once approved by the board.