Shree Renuka Sugars today said it is in talks with Balrampur Chini Mills to acquire promoters' stake in the country's second-largest sugar firm.
While Renuka Sugars is yet to offer any price, discussions between the two firms have started a month back.
"The talks are very much at a preliminary stage at the moment," company's Chief Financial Officer K K Kumbhat told PTI when asked whether the company was in talks to acquire Balrampur Chini Mills.
"As of now, we have not given any price quote. Our talks have not reached to this level," he added.
When contacted Balrampur Chini Managing Director Vivek Saraogi said: "I don't want to comment on market speculation."
In October, reports had said Balrampur Chini promoters were in talks to sell their total holding of 36.67 per cent to Bajaj Hindusthan. The Kolkata-based company, however, denied the reports.
Balrampur Chini has nine sugar factories in eastern Uttar Pradesh and has a capacity to crush 73,500 tonnes of sugarcane per day.
If the deal materialises, Renuka Sugars, which at present has a cane crushing capacity of 60,000 tonnes a day, would become second largest sugar manufacturer.
Bajaj Hindusthan is the country's largest sugar mill with an total cane crushing capacity of 1,36,500 tonne per day.
Shree Renuka had recently acquired Brazil-based sugar and ethanol producer Vale Do Ivaí (VDI) for $82 million. It also assumed debt, which need to be repaid over eight years. The enterprise value of VDI is $240 million.
Shree Renuka Sugars shares closed at Rs 215.6, up 3.45 per cent on the BSE, while that of Balrampur China was down by 4.37 per cent at Rs 135.75.
