Shree Renuka Sugars today said it was in talks with Balrampur Chini Mills to acquire the promoters’ stake in the country’s second-largest sugar company. While Renuka Sugars is yet to offer any price, discussions between the two companies started a month back.
“Talks are very much at a preliminary stage at the moment,” the company’s Chief Financial Officer, K K Kumbhat, said when asked if the company was in talks to acquire Balrampur Chini. “As of now, we have not given any price. The talks have not reached 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 that 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 the second largest sugar manufacturer.
Bajaj Hindusthan is the country’s largest, with a total cane crushing capacity of 136,500 tonnes per day.
Shree Renuka had recently acquired Brazil-based sugar and ethanol producer Vale Do Ivaí (VDI) for $82 million (Rs 384 crore). It also assumed debt, which need to be repaid over eight years. The enterprise value of VDI is $240 million.
At 14.40, Shree Renuka Sugars shares were trading up by 4.29 per cent at Rs 217.35 on the BSE, while that of Balrampur China were down by 3.63 per cent at Rs 136.80.
