The Uttar Pradesh Cabinet has approved a proposal to impound Rs 1,000 crore from Bajaj Hindusthan’s power plant in the state to pay sugarcane farmers.
According to the amended UP Sugarcane (regulation of supply and purchase) Act 1953, government agencies can impound the assets of the group companies if any firm defaulted on the payment of sugarcane dues. The proceeds could be used to settle the outstanding amount.
Bajaj Hindusthan’s Lalitpur-based thermal power project supplies electricity to the state power utility under a power purchase agreement.
The Bajaj Group’s sugar mills in the state collectively owe more than Rs 2,361 crore in farm dues. However, the company had consistently been defaulting on its liabilities citing outstanding debt on the state-owned UP Power Corporation.
Hindusthan for the payment of the sugarcane farmers. The payment of Rs 1,000 crore by the UPPCL would be effected in two equal installments of Rs 500 crore each.
Following the payment of Rs 1,000 crore, the outstanding on the Bajaj Hindusthan Group would come down to Rs 1,361 crore.
The Cabinet has also allowed the power utilities to mop up Rs 8,000 crore from the capital market by floating bonds. The funds would be used towards improving the power distribution infrastructure to ensure uninterrupted supply to consumers in the state.
The company could not be reached for comments despite attempts till the time of going to press