PricewaterhouseCoopers and Ernst & Young emerged as the two frontrunners among six companies which have come forward in response to the Uttar Pradesh government?s call for assistance in the sale of the entire equity shares of the government in Uttar Pradesh State Sugar Corporation Limited to appropriate strategic purchasers.
The government had invited Expressions of Interest (EoIs) from valuers having relevant experience in valuation of shares. Other companies which had responded to the GoUP?s call were Crisil and ICRA. The last date for the submission of bids for the appointment of valuers was June 6. The names of the two shortlisted companies would be forwarded to the government, after which they would be sent for the cabinet?s approval.UPSSCL and its subsidiaries are engaged in the production and sale of sugar with a total of 33 mills situated at different locations in the state.
It may be mentioned that the Government of Uttar Pradesh had invited global tenders for the transfer of shares through a competitive bidding route and has invited Expression of Interest cum Request for Qualification from interested parties. The last date for submitting EOI/RFQ Application is June 13.
While some of the bigger sugar mills of UPSSCL like Dariapur in Rae Bareli, Chandpur in Bijnore, Nandganj in Ghazipur, Ghatampur in Kanpur, Siswa Bazaar in Maharajganj and Jarwal Road in Bahraich districts have a daily sugar cane crushing capacity of 1250 metric TCD, the others have a capacity of around 800-1000 metric TCD. On an average, the total capacity of the 33 sugar mills of the UPSSCL stands at around 33000 TCD. The 95 private sector sugar mills in the state, on the other hand, have a combined capacity of around 4,00,000 TCD.
The government of UP has started looking for private buyers for the loss-making 33 sugar mills of the Corporation as it is incurring a whopping loss of Rs 2900 crore in running them. While the government will retain the liabilities of cane dues, labour and employees dues of UPSSCL and its subsidiaries, all other liabilities will be transferred to and bourne by the strategic purhaser. Apart from this, the State government had in June last year, taken a decision to hand over the sugar mills in the co-operative sector to the private sector, in which it has a 51% stake. It had already started looking for buyers and had invited industrial houses to submit EoI and had also appointed Ernst & Young as a consultant. But the attempt proved to be a non starter as the sugar industry expressed reservations in buying the mills due to some hurdles. In fact, the industrial development and cane development departments are now currently working on a roadmap through which the move to privatise the sugar mills in the co-operative sector, too, can be finalised soon.