Bajaj Hind buyout, Dhampur spread plan bode sweet times for sugar sector

It was a sweet day for the Indian sugar industry as two major players "" Bajaj Hindusthan and Dhampur Sugar Mills "" announced acquistion and expansion plans.

Bajaj Hindusthan will buy out 55 per cent of the promoters holding in Pratappur Sugar & Industries Ltd "" 19,80,000 equity shares "" for a consideration of Rs 10.89 crore.

Pratappur Sugar informed the Bombay Stock Exchange (BSE) of the sale decision of its promoters today. It added that the sale of shares was conditional upon the urchaser complying fully with Sebi (Substantial Acquisition of Shares & Takeover) Regulation 1997 and other applicable laws. It indicated that Bajaj Hindusthan would come out with a mandatory 20 per cent open offer for the shareholders of Pratappur Sugar.

The buyout news pushed the Bajaj Hindusthan stock up by 6.06 per cent to Rs 200.25 on the BSE, from the previous closing of Rs 188.80.

In another development, Dhampur Sugar Mills Ltd decided to increase its existing capacity by way of greenfield expansion. The company is planning to set up a sugar plant of 6000 TCD, which will also have a power generation capacity of 25 MW.

The company will also be enhancing its sugar, distillery and power generation capacities in the existing units. The expansion activity will be borne with an investment of Rs 425 crore.

Dhampur Sugar has informed the BSE that along with the expansion plans, the company's board of directors approved the change in the company's authorised share capital from Rs 75 crore to Rs 100 crore, which includes changing equity share capital to Rs 75 crore and preference share capital to Rs 25 crore.

The company will raise funds by issuing Global Depository Receipt (GDR) and Foreign Currency Convertible Bonds (FCCB) or public offering to the tune of $55 million.

The company's board of directors also approved the increasing of the foreign investment limit from 24 per cent to 49 per cent. It called for an Extra Ordinary General Meeting (EGM) on September 26 for getting shareholders' approval of the aforesaid matter.