SBI Files Insolvency Proceedings Against Bajaj Hindusthan Sugar Company at NCLT

State-owned SBI has filed for insolvency against the country’s largest sugar company, Bajaj Hindusthan Sugar Ltd.

SBI as financial creditor filed the plea before the Allahabad Bench of the National Company Law Tribunal (NCLT).

In a regulatory filing, Bajaj Hindusthan Ltd informed that “we understand that the State Bank of India, financial creditor through its solicitor, has initiated the process of resolving the corporate insolvency of Bajaj Hindusthan Sugar Ltd” .

The petition was filed under Section 7 of the Insolvency and Bankruptcy Code 2016.

In the last financial year, the company recorded a consolidated net loss of Rs 267.54 crore and revenue of Rs 5,607 crore.

On August 12, the company announced that for the quarter ended June this financial year, its net loss stood at Rs 45 crore and its total revenue at Rs 1,538 crore.

“During the June 22 quarter, due to the late payment of loan installments and coupon rate interest on potentially convertible debentures, the lenders classified the company’s account as a non-performing asset ( NPA) as per RBI loan classification regulations.

The company’s lenders signed an ICA (Inter Creditors Agreement) on January 28, 2022 for the resolution of the company’s accounts, the company had indicated in the notes to the first quarter financial statement accounts.

Debt restructuring under RBI’s S4A program has improved the company’s liquidity position, he said.

“However, given the status of unpaid cane duties and funds for debt service, the company is further discussing with the lenders a debt resolution plan to have a durable solution to improve its liquidity. “, had declared Bajaj Hindusthan.

The resolution plan contemplates reducing its overall debt, realigning its capital structure, paying farmers’ cane rights, increasing cane availability and supply, and more.

“The company is also exploring/evaluating various corporate restructuring options to streamline the business and enhance the value of the business,” Bajaj Hindusthan said.

Bajaj Hindusthan Sugar Ltd is India’s leading sugar and ethanol manufacturer.

Part of the Bajaj (Kushagra) group, it is headquartered in Mumbai, Maharashtra.

The company owns fourteen sugar factories, all located in Uttar Pradesh.

These plants have an overall sugarcane crushing capacity of 136,000 tons crushed per day and an alcohol distillation capacity of 800 kiloliters per day.

It is also one of the largest producers of ethanol and currently produces 38 million liters of ethanol per year. The company has increased its ethanol production capacity to around 218 million liters per year.

Bajaj Hindusthan said the company generates nearly 430 MW of electricity from bagasse produced at its sugar mills and supplies nearly 100 MW to the UP State Grid.

Additionally, it has five 90 MW coal-fired power plants adjacent to its sugar units which generate an additional 450 MW of electricity for the public grid.

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Rachel J. Bradford