Tamil Nadu sugar mills seek 3-year loan moratorium after 2016 drought

Many of the sugar companies are likely to default on their debt servicing and become NPAs, which might lead to action from banks and massive direct and indirect job losses

Sugar mills in Tamil Nadu have approached the central government seeking a three-year moratorium for the Sugar Development Fund (SDF) and soft loans given in the past, with a time-frame of seven years to repay the loans after the moratorium period. This comes after the industry in the state has faced a decrease in processing in the past several years.    

The industry has been facing various challenges and the capacity utilisation of sugar mills in the state has come down from 84 per cent in 2011-12 to 21.66 per cent in 2017-18, said the South Indian Sugar Mills