Two K K Birla sugar companies — Oudh Sugar Mills Limited (OSML) and Upper Ganges Sugar Industries Limited (UGSIL) — the brands under Birla Sugar, are planning restructuring in order to consolidate.
The respective boards have given their consents for enhancing the stakeholder value, a company statement said. The schemes would undergo Allahabad High Court approved processes.
The main tenet of the scheme was to bring the Uttar Pradesh and Bihar Sugar manufacturing facilities under two separate new entities, since the dynamics of the sugar industry in Bihar and Uttar Pradesh are vastly different. At present both companies have units in either of the States.
The proposed restructuring exercise aims to achieve better efficiencies and commercial synergies, the statement said.
At the same time, the food processing, tea and other business of Oudh Sugar would be hived off to other subsidiaries.
“They have different dynamics and have matured significantly over a period of time therefore it is intended to house them into separate entities to facilitate future growth and monetization of these businesses,” the statement said. The decisions were arrived at on the basis of analysis carried out by renowned consultants.
The management further stated, “We are pleased to announce this restructuring exercise and are hopeful that this will bring out the desired results. The proposed restructuring would entail liquidation of OSML and UGSIL through the process of merger and replacement of the same with four new listed entities.”
