Odisha govt to stand guarantee for loan to Markfed, Aska sugar mill

Reported by Chinmaya Dehury

Bhubaneswar, May 8:

Eight days before the election results are scheduled to come out, the Odisha cabinet today gave its seal of approval to four decisions, including providing loan to the ailing Odisha State Cooperative Marketing Federation (MARKFED) and Aska sugar mills as part of its restructuring process.

The Cabinet has approved the proposal for the government to stand guarantee for loan to Aska sugar mill and MARKFED.Odisha Govt Logo

MARKFED would get a Rs 30 crore loan from the co-operative bank while Aska Sugar mill would get Rs 20 crore with the government being the guarantor in both the cases.

As part of the capital fund restructuring process, the government will scale up its equity participation in MARKFED to Rs 206.83 crore from the present level of Rs 29.56 crore, which would allow the Federation to boost its bottomline and business to the tune of Rs 1,000-crore level per annum.

The Federation, which provides agricultural inputs like fertilisers and pesticides and procures produce of farmers, has been facing heavy losses of late due to the default of Regional Cooperative Marketing Societies (RCMSs) for which it could not repay its loan to the government.

With accululated loss of Rs 114.82 crore till March 31, 2013, the Federation is not considered creditworthy by financial institutions, including commercial banks.

The government has also decided to restructure the capital fund of the sugar mills to make them profitable ventures.

The Cabinet meeting, the last of the Naveen Patnaik in the 14th Assembly, also decided to recommend to the Governor dissolution of the Assembly to pave the way for formation of the 15th Assembly after May 16, the Judgment Day for the political parties.

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