GMR Ind to buy Karnataka sugar company

Hyderabad: GMR Industries, the agri business arm of GMR group, informed the stock exchanges that it has decided to acquire Alagawadi Bireshwar Sugars Pvt Ltd, which holds a licence to set up and operate a 3,500 TCD sugar mill at Raibagh in Karnataka.

When contacted, the company said that it has earmarked Rs 450 crore for the acquisition and expansion of the sugar company.

“We are going to invest Rs 450 crore on the expansion,” Mr R. Ramakrishnan, Managing Director-designate, said.

In all, the company has lined up a capital expenditure of Rs 800 crore in the next three years for various expansion projects .

Asked how it planned to raise funds, he said the company recently announced a Rs 250-crore rights issue. “The rest of the funds would be through debt,” he said.

The company would have a total sugar capacity of 11,000 tcd (tonnes crushed per day) and cogeneration capacity of 46 MW by March 2009, he said.

While the 3,500 tcd sugar complex in Haliyal is ready, the 2,500-tcd cooperative sugar plant it took on lease in Ramdurg (both in Karnataka) would start production in the forthcoming sugar season. The company runs a 5,000-tcd plant at Sankili (Andhra Pradesh).

The company registered a net profit of Rs 14.41 crore in the quarter ended March 31, as against a loss of Rs 6.48 crore in the same quarter last year.

The revenue for the quarter was put at Rs 56 crore as against Rs 51 crore during the period, Mr Ramakrishnan said.

Mr Ramakrishnan has been designated as Managing Director, replacing Dr V. Raghunathan, who would be focusing on GMR Varalakshmi Foundation.

For the financial year 2007-08, the company registered a lower net profit of Rs 6.50 crore as against Rs 19.87 crore. The revenue for the year was at Rs 152.54 crore as against Rs 192.32 crore, he said.

The drop in profit and revenues was attributed to lesser realisation of sugar price and shortage of cane.

“We lost Rs 320 a quintal in 2007-08 when we compare with the price in the previous year.

Besides, there was a dip in availability of cane too resulting in lesser volumes,” he said.

The board recommended a 10 per cent equity dividend and 8 per cent on preference shares.

The company has decided to shift the registered office to Bangalore from Hyderabad.