Bajaj Hindusthan Sugar & Industries Limited
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BSE Code:
507500
NSE Code:
Business Profile
Business Profile
Bajaj Hindusthan Sugar & Industries produces sugar and ethanol. Formerly known as Pratappur Sugar & Industries, it was taken over by the Bajaj group in Dec. 2005 and renamed. Capacity of the plant has been increased to 6,000 TCD from existing 3200 TCD. The company is presently a subsidiary of Bajaj Hindustan.
Financials
For the last year ended Mar.31, 2006, the company`s net sales rose 32.87% from the previous year to Rs 647.2 million. Net loss increased 10.81 times to Rs 68.5 million.
For the latest quarter ended Jun. 30, 2006, sales rose 26.91% to Rs 209.40 million compared with the corresponding quarter last year. The company also earned a profit of Rs 1.50 million as against a loss of Rs 20.20 million in last year's quarter.
Recent Developments
Bajaj Hindusthan Sugar & Industries informs BSE that the board of directors of the company at its meeting held Dec.06, 2006, inter alia, approved / recommended / noted the following:
1. Commencement of production at the existing plant at Pratappur, dist. Deoria (UP) for the sugar season 2006-07 with enhanced capacity of 6,000 TCD as against 3,200 TCD up to last sugar season. The company has incurred a capital cost of Rs 600 million (approx.) for the said enhancement in capacity.
2. Raising of funds up to Rs 3 billion by way of issue of equity shares / convertible securities as under:
(i) An aggregate sum of USD 61.8 million to be subscribed by J P Morgan Securities (Asia
Pacific) and/or its affiliates towards (a) preferential issue of equity shares upto an aggregate value of USD 9 million, priced at Rs 50 a share; and (b) issue of FCCBs upto an aggregate value of USD 52.8 million.
(ii) A sum of Rs 250 million to be subscribed by Bennett, Coleman towards preferential issue of equity shares priced at Rs 50 a share.
The above fund is proposed to be utilized for the purpose of ongoing project of setting up following three greenfield sugar plants and one distillery:
Unit - Kunderki Sugar Plant
Location - Tehsil: Kunderki Dist: Moradabad (UP)
Capacity - 15,000 TCD
Unit - Rudauli Sugar Plant
Location - Tehsil: Rudauli, Dist: Basti (UP)
Capacity - 7,000 TCD
Unit - Utraula Sugar Plant
Location - Tehsil: Utraula, Dist: Balrampur (UP)
Capacity - 12,000 TCD
Unit - Rudauli Distillery
Location - Tehsil: Rudauli, Dist: Basti (UP)
Capacity - 160 KL a day
The estimated project cost for the above mentioned increase in sugar capacity from 3,200 TCD to 40,000 TCD and one distillery of 160 KL a day capacity of approximately Rs 12.30 billion is proposed to be funded as under:
a. Equity contribution by holding company - Rs 3.30 billion
b. Proposed preferential issue referred to above - Rs 650 billion
c. Proposed GDR/ADR/FCCB or debt or a combination thereof - Rs 8.35 billion
The project work at all the sites is in progress as per the schedule. The sugar plants are scheduled to be commissioned by around Nov. 2007 and the distillery is expected to be commissioned in Feb. 2007. After completion of these projects, the company will have an asset base of around Rs 13 billion and the company is likely to crush an aggregate of 58 million quintal of sugarcane and produce 5.8 million bags of sugar. The annual turnover of the company is expected to increase from Rs 703 million for the last financial year ended on Mar. 31, 2006 to Rs 11 billiion during the financial year ended Sep. 30, 2008 and the EBIDTA margin is expected to be in the region of 17%. However, turnover and margin would be subject to the then prevailing product prices.
The proposed Investments in above three sugar plants in Uttar Pradesh by the company would fulfill the requisite criteria of the minimum required investment in setting up new sugar plants under the "New Sugar Industry Promotion Policy 2004" framed by the state govt. of Uttar Pradesh to promote new investments in sugar industry in the state. Accordingly, the company will qualify for availing all the benefits and concessions available under the said policy in respect of all the above three plants for a period of 10 years.
3. Convening of an extra-ordinary general meeting of the shareholders of the company to be held Dec. 29, 2006, inter alia, for obtaining the following requisite approvals:
a) Proposed preferential Issue of equity shares to (i) J P Morgan Securities (Asia Pacific) and/or its affiliates and (ii) Bennet Coleman
b) In-principle approval under section 81(1A) to enable board of directors for raising up to Rs 15 billion in form of issue of further shares in domestic/international markets by way of private placement/public issue/issue of GDRs/ADRs/FCCBs, etc. or a combination thereof subject to compliance with the requisite SEBI guidelines and other legal statutory requirements;
c) Increase in authorised equity share capital of the company to Rs 400 million.
Future Plans
The company is setting up three greefield sugar plants at Kunderki (UP - 15000 TCD), Rudauli (UP - 7000 TCD) and Utraula (UP - 12000 TCD), and a distillery at Rudauli (UP - 160 KL a day).
Total cost of the project is estimated at Rs 12,300 million and this amount is sought to be raised by way of equity shares and convertible securities, including GDR/ADR/FCCB or debt or a combination thereof amounting to Rs 8,350 million.