SBI to withdraw insolvency plea against Bajaj Hindusthan Sugar
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State Bank of India has made a submission in NCLT regarding withdrawal of its application for initiating corporate insolvency resolution process against Bajaj Hindusthan Sugar Ltd.
Bajaj Hindusthan Sugar in a regulatory filing said that the NCLT vide its order dated October 13, 2023 (copy enclosed), considered the submissions made on behalf of SBI (the financial creditor) concerning withdrawal of the petition and fixed the next date of hearing on 25 October 2023 for consideration and passing appropriate order on the application for withdrawal.
In the submission made by SBI in the NCLT, the lender said that the outstanding amount as fallen due has been paid by the Corporate Debtor on 12 October, and therefore the matter is liable to be dismissed as withdrawn.
State Bank of India (SBI) had filed an insolvency petition against Bajaj Hindusthan Sugar Ltd in the National Company Law Tribunal (NCLT) in Allahabad, India. This came after lenders classified their loans to BHSL as non-performing assets (NPAs) in the June 2022 quarter due to delayed payments of loan installments and interest on optionally convertible debentures.
In a regulatory filing, BHSL had disclosed that it could only pay ₹26 crore of the ₹108.60 crore principal installment due on June 30, 2022, leaving ₹82.60 crore outstanding. A consortium of 12 banks has a total exposure of ₹4,762.59 crore to Bajaj Hindustan Sugar Ltd as of July 30, 2022. The banks with the largest exposure to the company are SBI (₹1,192.48 crore), Punjab National Bank (₹1,081.58 crore), and Indian Bank (₹507.46 crore).
BHSL had slipped into the red, reporting a standalone net loss of ₹49.13 crore in the first quarter of FY23 against a net profit of ₹99.26 crore in the preceding quarter. It had reported a net loss of ₹40.55 crore in the year ago period.
The company has attributed its losses to high raw material (sugarcane) and other input costs, relatively lower sugar prices, higher depreciation, and finance expenses. It has also said that sugar prices are determined by market forces based on demand and supply, which are external factors.
