Rajashree Sugars to buy Sical unit

Our Corporate Bureau

Chennai, Aug 28: RAJASHREE Sugars Ltd has signed a memorandum of understanding (MoU) with the South Indian Corporation (Agencies) Ltd (Sical) for the acquisition of the latter’s sugar unit for a consideration of around Rs 50 crore.

“The company has entered into an understanding with South Indian Corporation (Agencies) Ltd (Sical) for acquisition of their sugar unit situated at Mundiampakkam subject to necessary approvals”, according to a Madras Stock Exchange (MSE) notification.

Rajashree Sugars has an installed capacity of 2,500 TCD factory while Sical has a capacity of 4,000 TCD. According to sources close to the deal, Rajashree would be taking over Sical’s sugar division at a consideration of around Rs 50 crore. This would be subject to the approval of the shareholders of both the companies.

Sical officials, while contacted, confirmed the report. “We have entered into an agreement with Sical for hiving-off our sugar division. The other details of the deal including the actual amount has to be worked out with the concurrence of the shareholders”, a Sical official has said. He added the company has called for the shareholders meet on September 27 to consider the proposal. Sical’s sugar division, last year, had posted a loss of Rs 10.4 crore.

The company is currently streamlining its sugar business by bringing in new technology and equipment. The division achieved a recovery in excess of 11 per cent. Sical had earlier said that it would be pulling out from all business except logistics.