GoM concludes meeting on Nizam Sugars' takeover

Source says govt may pay Rs 230 cr for stake buyout

Though a senior minister involved in the exercise maintained they were yet to form a conclusive opinion, a government source said the GoM was in favour of taking over the company

The Group of Ministers(GoM), which was constituted to study and suggest to the government one of the two alternatives of either acquiring back the 51 per cent stake in Nizam Sugars or divesting the remaining equity to the private owner, held its last meeting on Friday.

Though a senior minister involved in the exercise maintained that they were yet to form a conclusive opinion on the issue, a government source said the GoM was in favour of taking over.

“The government may pay Rs 230 crore to the owners of Nizam Sugars for buyout of the stake,” a source said without elaborating the basis on which these valuations were arrived at.

State finance minister Anam Ramanarayana Reddy, who heads the GoM, told Business Standard a finality on this matter would be reached after studying the inputs submitted by the officials.

The private party wants the government to make full and final settlement either in terms of buying out the stake from it or divesting the government equity in its favour, according to sources.

In 2002, the state government headed by N Chandrababu Naidu sold 51 per cent stake in Nizam Sugars to Delta Paper Mills, owned by Vijayawada-based Gangaraju Group, for a consideration of Rs 65 crore. The government holds the remaining 49 per cent stake in the company.

Telangana supporters, including a section of Congressmen, have been demanding the government to restore the public sector status of Nizam Sugars for the past ten years.