Mills have accumulated losses of Rs 350 cr
The Supreme Court today allowed the Uttar Pradesh government to proceed with the disinvestment of 11 ailing Sugar Corporation mills.
The accumulated losses of all these mills are estimated at Rs 350 crore.
However, the court has observed that the disinvestment would be subject to the final judgement in the case.
“The government was confident of a favourable judgement in the case, since the losses on account of these mills were mounting on the exchequer,” an official told Business Standard.
Now, the bidding process is likely to be completed by June 4 and a final decision taken in the June 6 core-committee meeting here to be chaired by state chief secretary Atul Kumar Gupta.
The Allahabad High Court had already given its nod for the proposed disinvestment with the rider that the mills were not closed down and the land usage remained the same.
These units, which are located all over the state, have enormous land bank in prime locations, but obsolete machinery. The government had decided to disinvest them to unlock their value, usher in operational efficiency in the sugar sector and cut on its losses.
A total of 34 sugar units, including 11 UP Sugar Corporation and 23 federation mills, had been put on block for disinvestment. Earlier, the Allahabad HC had stayed the sale of two federation units over multi-state ownership issue with Uttarakhand. The sale process, which was set in motion after Mayawati came to power in May 2007, has been facing challenges on multiple fronts, including lack of interest among the private parties and litigations.
Some of the prospective bidders for these mills, include Bajaj Hindusthan, Indian Potash, Wave Industries, Lakshmi Sugar, Dalmia Sugar, Patel Engineering, SBEC Bioenergy, Tikaula Sugar Mills, Dwarkesh Sugar Industries, Balrampur Sugar, Triveni Engineering, Rama and Oswal Groups.
