Even after extending the date of submission of EoI/RFQs for the privatisiation of 33 sugar mills of the UP State Sugar Corporation Ltd, from June 13 to June 30, the Uttar Pradesh government has received a lukewarm response from the industry. Only five bids have been submitted, out of which Bajaj Hindustan and Dalmia Cement are the two companies which had submitted their bids before the first deadline of June 13, while the three new companies which have evinced interest are the Magna group, the Diamond group and the Ponty Chada group.
Till late, officials of the cane department along with the consultant to the project, Earnst & Young, were busy examining the bids and also whether they fulfilled the eligibility criteria. The financial bids are expected to be opened once the process is completed. According to officials, the financial bids are likely to be opened on Tuesday.
Interestingly, while Bajaj Hindustan is the only group which has interest in the sugar industry and is therefore interested in buying the better ones out of the 15 running sugar companies, the other companies, which have an interest in the real estate sector, are looking at acquiring some of the sick sugar mills for their land value. However, according to sources in the sugar industry, none of the interested bidders are interested in buying out all the 33 mills, while that is precisely what the government of Uttar Pradesh is looking at, as a partial sellout would leave it with the responsibility of managing the worst of the mills.
In order to avoid that situation, the government is also keenly interested in bringing together interested sugar mills and real estate firms to form a consortium, which could have jointly bid for the privatisation bid. But, till the closing hours of submitting the EoI/RFQ, no such consortium could be formed.