Shares of Bajaj Hindustan Sugar plunged over 12 percent a day after the State Bank of India (SBI) filed an insolvency petition in the National Company Law Tribunal (NCLT) against the company.
At 11:58 am, shares of Bajaj Hindustan Sugar traded at Rs 8.8, a 12.51 decline from the previous close on the BSE.
The company said in a regulatory filing that financial creditor SBI had initiated a Corporate Insolvency Resolution Process. SBI has filed the petition in the Allahabad bench of the NCLT.
The petition has been filed under Section 7 of the Insolvency and Bankruptcy Code, 2016, as reported by news agency PTI. The section is evoked when a corporate debtor makes a default.
On August 12, the company released its financial earnings results for the April-June quarter. It reported a net loss of Rs 45 crore, and revenue from operations stood at Rs 1,538 crore.
"During the June quarter, due to delayed payment of loan instalment and coupon rate interest on optionally convertible debentures, the lenders have classified the company's account as non-performing asset (NPA) as per the RBI regulations on loan classification," Bajaj Hindustan said.
However, the company said that considering the status of outstanding cane dues and funds for servicing debt obligations, it is discussing a debt resolution plan with the lenders. "This will have a lasting solution in improving liquidity," said Bajaj Hindustan.
The resolution plan envisages a reduction of its overall debt, realignment of its capital structure, payment of cane dues of farmers, increasing cane availability and supply, etc.
"The company is also exploring/evaluating options for corporate restructuring to streamline the business and enhance the company's value," Bajaj Hindusthan said in the regulatory filing.
Bajaj Hindusthan Sugar is India's leading sugar and ethanol manufacturing company. It is one of the largest ethanol producers and produces 38 million litres per year. The company has increased its ethanol manufacturing capacity to roughly 218 million litres per year.
(With inputs from PTI)
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