• Bajaj Hindusthan Sugar Limited has informed the Stock Exchange about initiation of IBC proceedings
• The financial creditor is SBI.   
• During Q2 results, Bajaj Hindusthan Auditors had qualified non-provisioning of YTM premium up to June 30, 2022, as well as coupon interest on OCD for the fiscal quarter ending June 30, 2022.

Bajaj Hindusthan Sugar Limited has informed the Stock Exchange that the State Bank of India has filed an insolvency petition against the company with the Hon’ble National Company Law Tribunal, Allahabad Bench.

Section 7 of the Insolvency and Bankruptcy Code 2016 has been invoked.

The company has a presence in the sugar, distillery, and power industries. The company is India’s leading sugar and ethanol manufacturer.

The financial creditor is SBI. Bajaj Hindusthan disclosed in accordance with Regulation 30 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.

During the June quarter, the company earned Rs 1523.78 crores in revenue and incurred a net loss of Rs 49.13 crores.

Due to late payment of loan instalments and coupon rate interest on optionally convertible debentures during the June quarter, lenders classified the Company’s account as Non-Performing Assets (NPA) in accordance with RBI loan classification regulations.

The Company has issued Optionally Convertible Debentures (OCDs) totaling Rs. 3483.25 Crore to the Company’s Joint Lenders’ Forum (JLF) in accordance with the Scheme for Sustainable Structuring of Stressed Assets  to convert a portion of the unsustainable debt. OCDs give the holder the option to convert the outstanding OCDs into equity shares of the Company at a price determined by applicable laws (including the ICDR Regulations).

OCD can be redeemed in 13 equal instalments beginning with the fiscal year 2024-25. According to the last published financial related to the June Quarter results, the YTM of Rs. 1.784.12 Crore from the date of OCD allotment until March 31, 2022 is treated as a contingent liability and will be accounted for as finance cost when the respective OCDs are redeemed. The Company had also made no provision for coupon rate interest on such OCD and will not consider YTM after March 31, 2022. According to management, said coupon rate interest and YTM will be treated in accordance with the financial restructuring plan submitted by the Company to the lenders.

Bajaj Hindusthan Auditors had qualified non-provisioning of YTM premium up to June 30, 2022, as well as coupon interest on OCD for the fiscal quarter ending June 30, 2022.

On January 28, 2022, the Company’s lenders signed an ICA (Inter Creditors Agreement) for the resolution of the Company’s accounts. The overdue amount from the principal instalment of Rs 108.60 Cr due on March 31, 2022 was Rs 8.96 Cr as of June 30, 2022 and subsequently paid by July 6, 2022. Interest on OCD for FY22 amounted to Rs. 78.37 Crore (Net of TDS) due on 31.03.2022 had not been paid and had been treated in accordance with the company’s financial restructuring plan. Also, of the Rs. 108.60 Cr principal instalment due on 30.06.2022, Rs. 40.50 Cr has been paid as of August 5, 2022.

During the June quarter, the Company had exposure totaling Rs. 1740.98 Crore in three wholly-owned subsidiaries and Rs. 511.29 Crore in another company, for a total of Rs. 2252.27 Crore in investments, loans, accumulated interest on these loans, and receivables.

Bajaj Hindusthan Sugar Limited shares were trading in the red on the BSE. The scrip finished 12.12% lower at Rs 8.92.

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