The Hindu Business Line : Balrampur Chini to buy Dhampur Sugar unit for Rs 182 cr

BALRAMPUR Chini Mills Ltd will be acquiring a unit of Dhampur Sugar Mills Ltd located at Rauzagaon in Barabanki district of Uttar Pradesh for Rs 182 crore.

According to announcements made by the two companies, the capacity of the unit is 7,500 tonnes crushed per day (TCD). It has a 12 MW co-generation power plant.

The Rs 457-crore Dhampur Sugar (DSML), which was incorporated in 1933 had a total capacity of 32,000 TCD before this transaction.

The unit has been working for the past 10 years and is currently ready for the 2005-06 crushing season, Balrampur Chini (BCML) said in a press release. The unit is estimated to crush 90 lakh quintals approximately.

"The acquisition is subject to requisite approval, including secured lenders of DSML. The purchase consideration has been fixed at Rs 182 crore for sugar and co-generation units as a whole, free from all debts," the BCML press release stated.

Explaining the rationale behind the acquisition, BCML, which recorded a Rs 816-crore turnover in 2004-05, stated that it was close to its existing operations in Barabanki district. About two years ago, the company had set up an integrated sugar unit at Haidergarh in the same district.

With this acquisition, the total sugar capacity of BCML will increase to 54,500 TCD and the total co-generation power production capacity will rise to 112.8 MW from 100.8 MW now.

In a notice posted on its Web site, DSML stated that the proceeds from this sale would be used for reducing its interest burden. ICICI Securities Ltd was its advisor in this transaction.

"With the cash infusion from this sale, DSML has given itself an enhanced potential and flexibility to harness exciting opportunities that lie ahead in the booming sugar sector," DSML stated.

On the BSE, the DSML scrip registered its 52-week high on Monday when it touched Rs 28.10 after opening at Rs 26.80. However, only 333 shares were traded at this exchange.

The BCML scrip was northward bound too. After opening at Rs 85 it touched a high of Rs 89.40. Approximately 3.7 lakh BCML shares were traded on the BSE on Monday.

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