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Harish Damodaran

Sale subject to UP Govt's approval

New Delhi , Oct. 29

The consolidation process in the sugar industry has received a fresh impetus, with Monnet Sugar Ltd executing an agreement to sell its mill to Sir Shadi Lal Enterprises Ltd (SSEL).

Monnet's factory at Unn in Muzaffarnagar district of western Uttar Pradesh currently has a crushing capacity of 5,000 tonnes of cane per day (tcd). It is barely 20 km away from SSEL's 6,250-tcd unit at Shamli in the same district.

The sale of Monnet's mill is, however, subject to approvals from the UP Government, as there is apparently a dispute over title of some portion of the land belonging to the local panchayat.

Previous deals

This is not the first time that Mr Sandeep Jajodia's Monnet Group has been seeking to dispose of its mill, nor is it the first attempt of Mr Rajat Lal's SSEL at eying acquisitions. The two parties had, in fact, almost concluded a deal three years ago, which did not go through. Subsequently, Mr Jajodia entered into sale negotiations with Mr Shishir Bajaj's Bajaj Hindusthan Ltd, which, too, failed to take off.

On its part, SSEL had, in 2002, tried to also purchase Mawana Sugars Ltd's currently 11,000-tcd mill at Titawi (again in Muzaffarnagar). At that time, the deal was scuttled due to objections raised by financial institutions.

If SSEL succeeds in taking over the Monnet factory, it would become among UP's top 10 sugar combines, behind Bajaj Hindusthan, Balrampur Chini, Triveni Engineering, Dhampur Sugar, the K.K. Birla Group, DCM Shriram Consolidated, Mawana Sugars, Simbhaoli Sugar and Dwarikesh Sugar Industries.

More Stories on : Mergers & Acquisitions | Sugar

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