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Empee Sugars & Chemicals Ltd has initiated a new restructuring process to bring all its power generation facilities under a single entity within the group.
As part of the plan, a group company will acquire Empee’s power assets at the Ambasamudram Integrated Sugar Complex in south Tamil Nadu. This entity will eventually hold a total of 80 MW of power capacity available within the group.
Besides, the company’s board will consider withdrawing the composite scheme of amalgamation of Empee Distilleries with Empee Sugars from the Andhra Pradesh High Court, Empee informed the exchanges. According to a senior executive in the company, it has a 50-MW cogeneration unit at Ambasamudram, where the sugar mill has not been in operation due to lack of cane availability. The power entity will be a relatively strong player without the problems faced by the volatility in the sugar business, the executive said.
Empee’s other power plants include a 20-MW cogeneration plant linked to its sugar mill at Naidupet, Andhra Pradesh; a 10-MW biomass power plant and a 2.5-MW wind generation facility under Empee Distilleries.
The amalgamation plan was aimed at bringing the sugar mills in Tamil Nadu and Andhra Pradesh together under one entity to ‘ring fence’ the cash-strapped sugar business. This has been pending in the High Court at Hyderabad for over two years, but the company is now considering withdrawing it.
Empee Sugars has accumulated losses of over ₹90 crore.
The company invested over ₹500 crore in the integrated sugar complex in Tamil Nadu, which failed to attain capacity due to raw material shortage.
The investment has idled for over three years now.
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