Shree Renuka Sugars, India’s biggest sugar refiner, is renegotiating its Rs 1,530-crore deal to acquire Brazilian sugar and ethanol maker Equipav.
The move follows differences over the current debt book size of the Brazilian company that stands at $700 million. The sugar manufacturer seeks substantial reduction of Equipav’s debt book.
Shree Renuka Sugars, which witnessed a fall in its share price in recent times due to higher sugar production and lower market price, is in an advanced stage of discussion with the Brazilian company, said a source.
The south-based sugar producer had evinced its interest to acquire 51 per cent in Equipav for $329 million in February, with a debt assumption of nearly $700 million.
Shree Renuka Sugars’ net profit witnessed a seven-fold increase to Rs 224 crore during January-March period from Rs 33.20 crore last year. The company’s revenue has also risen four times to Rs 1,806 crore during the same period.
The company, which had acquired VDI of Brazil in November 2009, also contributed positively to its balance sheet last year on the back of higher volume and greater realisation of price in both the domestic and international markets.
However, analysts say, the company might have to face tough times this year due to higher production of sugar and lower price realisation.
Sugar prices, which touched Rs 35-40 per kg last year, has already fallen to Rs 30 per kg. With production of sugar rising in the domestic market, sugar prices are expected to dip further.
