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| As per the sale plan, Shakti Sugars will pay 25 per cent of the price as down payment and the balance amount in three equal installments in three years.
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| The installments will be paid with interest at the rate of seven percent and will be backed by bank guarantees.
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| The total receipts of the government will be Rs 9.14 crores including interest during the period 2003 to 2007.
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| The sale of Badamba sugar mill is first among the 10 public sector units selected for disinvestments by the Orissa government in the first phase.
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| This is the also the first government unit to be sold in 10 years after the sale of Bamanipal charge chrome plant of Orissa Mining Corporation (OMC) to Tata Steel in 1993.
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| With the sale of Badamaba sugar mill Orissa has reclaimed its position as the forerunner in privatisation of PSUs in the country, said Jugal Mohapatra, secretary, public enterprise department.
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| Earlier briefing newsmen on the CCD decision the industry minister KB Singhdeo said, Shakti Sugar had initially offered to pay only Rs 3.51 crore for the deal with conditions that the money will be paid in three equal interest free annual installments with one year moratorium and no bank guarantee.
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| However, the inter departmental core committee of the state government which considered the proposal had set the reserve price for sale of the unit at Rs 8.5 crore.
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| Following prolonged negotiations deal was struck with Shakti Sugars with much higher price and terms favourable to the state government, Singhdeo said.
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| The sale of the unit is expected to enable the government wipe off liabilities to the tune of Rs 29.65 crores in the form of outstanding to various financial agencies and government guarantees.
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| These liabilities have been reduced to about Rs five crore through negotiated one time settlements that include total waiver of interest and up to 30 per cent of the principal.
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| Hence, the present sale will result in surplus for the government, besides curbing any further growth of liabilities.
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| Singhdeo said, there will not be any retrenchment of the 218 employees working in the mill after privatisation. This apart, 100 seasonal workers and more than 5,000 sugar farmers were dependent on the mill for their livelihood.
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| Thee mill was operating at below 50 per cent capacity and was incurring losses to the tune of one crore per annum.
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| The Baramba Cooperative Sugar Mill was set up in 1989 with a crushing capacity of 1250 tonnes of sugarcane per day and sugar production capacity of 18,750 tonnes per annum.
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| The mill is now operating under management lease contract to Shakti Sugar since 1993, and was advertised for privatisation in November 2003.
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| Shakti Sugars, which is amongst the top ten sugar producers in India, with its own mill at Dhenkanal in Orissa, was the sole bidder. The company has already submitted to the government an intensive plan to upgrade the Badamba plant and augment its production capacity through additional investments. |
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