Hot deals in UP sugar industry, Triveni to acquire control of Shamli Sugar Mill
The market for acquisition of sugar mills in Uttar Pradesh has hotted up due to better prospects in the sugar mill industry. The state is the country's biggest sugar producer. But since several sugar mills there are financially troubled, other groups are making efforts to buy them. This has led to a sudden spate of activities in the state's sugar industry.
Harvir Singh
Ajeet Singh
The market for acquisition of sugar mills in Uttar Pradesh has hotted up due to better prospects in the sugar mill industry. The state is the country's biggest sugar producer. But since several sugar mills there are financially troubled, other groups are making efforts to buy them. This has led to a sudden spate of activities in the state's sugar industry.
The Triveni Group is on track to acquire a 51 per cent stake in the Upper Doab Sugar Mill of Sir Shadilal Enterprises Ltd, one of the oldest sugar mills in the country located in Shamli district. It has been in financial distress for the last several years. Triveni Engineering and Industries Ltd has entered into an agreement to buy 25.43 per cent equity from two shareholders of the sugar mill. Shamli Sugar Mill was once seen as an example of better management. But for many years, it has been struggling to pay sugarcane farmers their dues.
A private sugar mill group and a public sector company are well advanced in talks to buy the Brijnathpur and Chilwaria sugar mills of the financially troubled Simbhali Sugar Mill Group, industry sources said.
The Shamli sugar mill owes about Rs 214 crore for the last crushing season (2022-23), over which farmers staged a sit-in for several months. The farmers’ sit-in had ended only after they were assured of payment by selling the sugar mill assets. The moving of Shamli sugar mill to Triveni Group has raised expectations of farmers for payment of sugarcane arrears. The sugar mill has not paid in full for January, 2023 of the previous season while the mill is making payment for the sugarcane supply of the current season.
In a statement to the Bombay Stock Exchange, Sir Shadi Lal Enterprises Ltd said that the company's Joint Managing Director Vivek Viswanathan and Director Radhika Viswanathan signed an agreement with Triveni Engineering and Industries Ltd on January 30, 2024 to sell 25.43 per cent of their stake has done. Triveni Engineering and Industries Ltd will soon acquire a 51 per cent stake in Sir Shadilal Enterprises, sources said. For this, it has issued an open offer for 26 per cent equity shares. It can be seen as a kind of process of acquisition.
Triveni Group has set a price of Rs 262.15 per share to buy shares of Sir Shadilal Enterprises under an open offer. A detailed public statement has been issued on February 6 for the open offer. Meanwhile, the stock of Sir Shadilal Enterprises Ltd touched a 52-week high of Rs 300 on Tuesday.
On January 25, 2024, the company's stock was around Rs. 136 per share. However, Rajat Lal, a shareholder in the company, holds about 30 per cent equity. It remains to be seen whether he sells or retains his equity.
Triveni Group is one of the leading private sugar mills in Uttar Pradesh. It has seven sugar mills including Khatauli, Deoband, Sabitgarh and Milak Narayanpur.
Over the past several months, the sugar industry in UP has been bustling with the sale and acquisition of several sugar mills. In October, 2023, Shri Renuka Sugars had signed a deal to buy Anamika Sugar Mills in Bulandshahr for Rs 235.5 crore.
Meanwhile, Dalmia Group had bought a sugar mill at Bhagoli in Hardoi district. It has been procured under the NCLT process. Dalmia Group has three sugar mills in Uttar Pradesh and two in Maharashtra.
