Simbhaoli Sugars has announced the transfer of its potable alcohol business into a wholly-owned subsidiary Simbhaoli Spirits for a consideration of Rs 136 crore, as part of its restructuring exercise.

In March, the company had decided to hive off potable alcohol and power businesses into separate entities to focus on by-product businesses and reduce the cyclical impact of the sugar business.

In a filing to the Bombay Stock Exchange, the company today said its board has approved the scheme of arrangement for transfer and vesting of its Simbhaoli Distillery Division to Simbhaoli Spirits Ltd.

The total consideration for transfer and vesting of the SDD alcohol undertaking in Simbhaoli Spirits would be Rs 136 crore. The consideration would be discharged by issue of 1.7 crore equity shares of Simbhaoli Spirits to Simbhaoli Sugars at Rs 80 per share, the filing added.

The distillery division comprises potable alcohol, country liquor, ethanol, extra neutral alcohol and rectified spirits.

The national capital-based Simbhaoli has three sugar facilities in Uttar Pradesh, the country’s second largest producer of the sweetener, with a production capacity of three lakh tonnes per annum.

It also has three alcohol distilleries, alongside sugar facilities with a combined capacity of 210 kilo litres of alcohol/ethanol per day.

“The main objective behind this exercise shall be to achieve growth in potable alcohol business by exploring new business and marketing areas for creation of new brands, their promotion and capacity enhancement,” the Simbhaoli Sugars CEO and Executive Director, Mr G.S.C. Rao, had said.

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