EID Parry buys out Pondi sugar mill for Rs 50 cr

EID Parry expects the Pondicherry-based New Horizon Sugar Mills Ltd, its new acquisition, to go on stream by the start of 2006.

EID Parry emerged as the highest bidder for taking over the sugar company under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act 2002 (Sarfaesi) for Rs 50.20 crore.

P Rama Babu, managing director, EID Parry, told Business Standard, the New Horizon Sugar Mills Ltd has a crushing capacity of 2,000 metric tonne and will add 50,000 tonne of sugar per annum.

EID Parry has four sugar mills at Nellikuppam, Pugalur, Pudukottai and Pettavaithallai in Tamil Nadu with a total crushing capacity of 13,800 TCD per day.

"We are positive that the high court of Madras will give its permission and confirmation when the session commences," he added.

Indian Bank, Vijaya Bank and City Union Bank are the debtors of the New Horizon Sugar Mills.

D Kumaraswamy, chief financial officer, EID Parry, said that the company will invest another Rs 3-4 crore in New Horizon Mill to bring it back to working condition.

The mill has been shut for nearly two years.

Babu said the close proximity of New Horizon Sugar Mills to EID's Nellikuppam plant in Cuddalore was the compelling factor for acquisition.

"We have already paid Rs 12.55 crore (25 per cent) for acquiring the New Horizon Sugar Mill, of which 50 per cent will be funded by internal accruals and the remaining through debt," said Kumaraswamy.