The Hindu Business Line : Soft loans for TN sugar mills to clear arrears

THE Tamil Nadu Government is set to assist five private sector sugar mills settle sugarcane arrears for 2002-03 through a soft loan of Rs 102.5 crore, according to sugar industry sources.

The loan has been cleared in-principle to EID Parry, Dharani Sugars, Thiru Arooran Sugars, Ambika Sugars and Sakthi Sugars.

The mills see this move as a mixed blessing, according to the sources. For one,, it will help them clear sugarcane dues at low interest rate of four per cent. But, the assistance comes tied to a higher statutory minimum price for sugarcane. The loan has been calculated on the basis of Rs 645 a tonne (linked to a sugar recovery of 8.5 per cent) - the initial price announced by the then Central Government that has been revised to Rs 695, which is the price that these mills will now have to bear.

The private sector sugar mills had at that time gone to court on this issue, stating that the price was unviable.

The Government has assisted the co-operative mills in clearing dues through a Rs 120-crore loan. The soft loan is to be disbursed by the Tamil Nadu Industrial Investment Corporation, the sources said.

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