Nagarjuna Group, as part of its recast plans, has decided to exit from the sugar business to concentrate more on the existing ventures. It is in talks with two potential buyers to selloff its two sugar units in Andhra Pradesh and Karnataka.
Two years back, investment companies of Nagarjuna Group have acquired Gayatri sugars, a 3,500 TCD (Tonne Crushing per Day) unit in Nellore district of Andhra Pradesh.
So far, the group has invested about Rs 48 crore in the form of equity and unsecured loan. Subsequently, Gayatri sugars has acquired Mahaleswar sugars, a 2,500 TCD unit in Karnataka, investing Rs 8 crore.
Though the Nellore unit is making nominal profit,the other unit is bleeding. Nellore unit is implementing a 22 mw-Rs 65 crore cogeneration power plant with IREDA term loan. The present plan is to hive-off these two units into separate companies to get suitable buyers. A major captive power requirement company has shown interest to acquire Gayatri Sugars, keeping in mind its cogeneration power plant.
In view of Nagarjuna's exposure to refinery and power projects,the promoters have decided to get out of some non-core businesses of the group. According to sources, they may also exit from Nagarjuna Palma, a drip irrigation systems company. "The whole idea is to consolidate all the strengths rather than branching out," sources said.
Though the group is planning to exit from domestic sugar business,there is no second thought on Vietnam sugar unit, since rules and regulations are all together different in that country, sources said adding that the unit is making profit.
