Winds of privatisation are blowing in the sugar industry of Uttar Pradesh, it seems. The UP government has decided to sell its equity in all the sugar mills of the UP State Sugar Corporation Ltd (UPSSCL) and has accordingly invited global tenders. This may herald complete privatisation of the country?s second largest sugar producing state.
UPSSCL and its subsidiaries have 33 mills situated at different locations in the state.
In pursuance of its disinvestment policy, the UP government intends to sell its entire equity in UPSSCL through the competitive route and has invited expressions of interest (EoI) from valuers to assist in the transaction.
The government has started looking for private buyers for the loss-making 33 mills. The corporation has run up a loss of Rs 2,900 crore in running them.
According to officials of the cane department, the government wants to finalise the disinvestment process before the next crushing season so that it is spared of tensions of running these mills.
While the government of UP will retain liabilities like cane dues, labour & employee dues of UPSSCL & its subsidiaries, all other liabilities will be transferred to the strategic buyer. In fact, the government has also decided to convert all outstanding GOUP loans to UPSSCL into equity and waive the interest. These will be done before the submission of the financial bids. The government has also clarified that the converted equity shall be automatically included in the offer for sale of equity.
The state will give the successful bidders the flexibility of alternate land use in the case of lands of 18 closed units and their six project lands.