Dwarikesh Sugar planning to repay high-cost debt

MUMBAI: DWARIKESH Sugar Industries, an integrated sugar manufacturer, is restructuring its high-cost debt. "The company is trying to reduce the interest cost on its loans through repayment and structuring of high-cost loans. The company has taken term loans of about Rs 28 crore for a 5-year period at the rate of 10-11.25 per cent. By repaying such high-cost debts, we can save about Rs 4-5 crore per year and go for fresh loans at even below 8 per cent rate," Mr J.R. Banka, General Manager (Corporate Affairs) of the company, told Business Line.

"After a successful IPO in November 2004, financial institutions have approached us with good offers. As a result, the company has started the restructuring exercise," Mr Banka said. "We have not yet finalised. It is premature to name of any institution at the juncture. These are under negotiations with financial institutions," he said.

The company's distillery unit with a capacity of 30 kilolitres per day will begin trial production by next month. The distillery unit for manufacture of ethanol will use molasses as a raw material available from the sugar plant. The company's board has also authorised its Chairman & Managing Director, Mr G.R. Morarka, to explore the possibilities of two new green field projects of 7,000 tonnes per day plants besides ongoing expansion of the existing plant.

-Dhimant Bhatt
Hindu Business Line
Date: 4-2-2005