The Uttar Pradesh Cabinet has approved a proposal to seize Rs 1,000 crore from the state's Bajaj Hindusthan power plant in order to compensate sugarcane farmers. Government authorities can seize the assets of group companies if any firm fails to pay sugarcane dues, according to the modified UP Sugarcane (Regulation of Supply and Purchase) Act 1953.
The proceeds might be put toward paying off the debt.
Under a power purchase agreement, Bajaj Hindusthan's Lalitpur-based thermal power facility provides energy to the state power company.
The sugar mills of the Bajaj Group in the state owe a total of Rs 2,361 crore in agricultural dues. The corporation, on the other hand, has a history of defaulting on its obligations, claiming unpaid debts owed to the state-owned UP Power Corporation.
The Cabinet has accepted a proposal by the Uttar Pradesh energy department to reroute Bajaj Hindusthan's power supply dues to sugarcane growers. The UPPCL would pay a total of Rs 1,000 crore in two equal installments of Rs 500 crore each.
The outstanding on the Bajaj Hindusthan Group will be reduced to Rs 1,361 crore after the payment of Rs 1,000 crore.
The Cabinet has also given electricity utilities the go-ahead to raise Rs 8,000 crore in the capital market by issuing bonds. The funds will be used to improve the state's power distribution infrastructure, ensuring that users have access to power at all times.
Despite repeated attempts, the firm could not be reached for comment at the time of publication.
About Bajaj Hindusthan Sugar Limited
Bajaj Hindusthan Sugar Limited (BHSL) is India's largest sugar producer and the world's fourth largest integrated sugar corporation. It has a total sugarcane crushing capacity of 136,000 tonnes per day (TCD) and an alcohol distillation capacity of 800 kilo litres per day (KLD) spread over 14 sites in Uttar Pradesh, India (UP). The corporation is a market leader in the Asian and Indian sugar industries, as well as one of India's leading producers of green fuel ethanol. It is a subsidiary of the Bajaj Group. Mumbai is the company's headquarters.
