Balrampur Chini to raise Rs 450 crore equity fund, to invest Rs 160 crore on lactogypsum plant

Sugar firm Balrampur Chini Mills Ltd on Thursday said it will invest Rs 160 crore to set up a lactogypsum processing plant in Uttar Pradesh and also raise up to Rs 450 crore through the issue of preferential shares to promoters as well as investors.

The company has also revised upwards its capital expenditure on new poly lactic acid (PLA) manufacturing plant in UP by Rs 230 crore to nearly Rs 3,100 crore.

In a regulatory filing, the company said the board has approved the establishment of a lactogypsum processing plant at Kumbhi, Uttar Pradesh, at an estimated project cost of up to Rs 160 crore.

The proposed plant, with an installed capacity of about 76 lakh gypsum boards per annum, is intended to process lactogypsum generated as a byproduct from its PLA manufacturing operations.

The board approved utilisation of a portion of net proceeds from the preferential issue, amounting to up to Rs 160 crore, towards funding of the project.

Moreover, the board approved the upward revision of the estimated capital outlay of the 80,000 tonnes per annum PLA project from Rs 2,850 crore to Rs 3,080 crore.

The board noted that the revision in the project cost is necessitated due to cost escalations of about Rs 230 crore, primarily on account of increase in prices of key construction materials, global supply chain disruptions and to incorporate further changes in engineering/designing during modelling review.

The revised enhanced capex, including cost escalations, will be funded through issue of equity shares on a preferential basis, debt and internal accruals, the company said.

Further, the board approved issuance and allotment of up to 93,16,771 equity shares for cash for Rs 483 apiece for an amount aggregating up to Rs 450 crore to promoters, members of the promoter group, and investors on a preferential basis.

The board also gave the nod to raise up to Rs 200 crore through the issuance of non-convertible debentures (NCDs) on a private placement basis.

Balrampur Chini Mills Ltd, one of the largest integrated sugar companies in India, has ten sugar factories in UP having an aggregate sugarcane crushing capacity of 80,000 tonnes per day. It also has distillery and co-generation operations of 1,050 kilo litre per day and 175.7 MW, respectively.

Kolkata-headquartered Balrampur Chini has diversified into bio-plastic business and is setting up a PLA manufacturing plant at Kumbhi in UP with a total annual capacity of 80,000 tonnes.