SBI has claimed that the Kushagra Bajaj-led company failed to bring in equity from associates that was promised as part of the restructuring package. Kushagra Bajaj is the son of Shishir Bajaj, a sibling of the late Rahul Bajaj.
Kushagra Bajaj also helms other group companies such as Bajaj Consumer Care and Bajaj Energy.
According to submissions made by SBI’s lawyer Sandeep Arora in court, the sugar manufacturer defaulted on ₹1,052 crore portion of its debt on March 3, 2022. The default amount, ₹140 crore, includes coupon payments on optionally convertible debentures that had been subscribed to by banks.
The company had been granted a restructuring package under the Reserve Bank of India’s guidelines for resolution of stressed accounts that were introduced on June 7, 2019. As part of the restructuring package, the sugar maker issued optionally convertible debentures worth ₹3,483 crore to banks and promised to bring equity into the company.
Bajaj Hindusthan Sugar did not responded to ET’s queries until press time.
The company had informed stock exchanges on August 16 that SBI had moved an application at NCLT’s Allahabad bench to initiate insolvency proceedings. NCLT has not admitted SBI’s application. The next hearing is scheduled for December 7.
Bajaj Hindusthan Sugar has 14 manufacturing plants, all located in Uttar Pradesh. It ranks amongst the top two sugar producers in India along with
The company clocked a turnover of ₹5,607 crore for the financial year ended March 31, 2022. It has provided funds worth around ₹1,700 crore in the form of loans and advances to subsidiary companies.
As per its disclosures and financial reports, the company has been facing problems in making payments to sugar cane farmers and lenders. It attributed its financial woes to high raw material prices and the high cost of servicing its debt. SBI has also initiated insolvency proceedings against
, another major sugar manufacturer in Uttar Pradesh, ET had reported on August 11.