UP to seize Rs 1,000 cr of Bajaj Hindustan to pay sugarcane farmers – World Affairs SRS

UP to seize Rs 1,000 cr of Bajaj Hindustan to pay sugarcane farmers

– World Affairs SRS

The Uttar Pradesh cabinet has approved a proposal to seize Rs 1,000 crore from Bajaj Hindustan’s power plant in the state to make payments to sugarcane farmers.

According to the amended UP Sugarcane (Regulation of Supply and Purchase) Act 1953, if a firm defaults in payment of cane arrears, government agencies can confiscate the assets of the group companies. The proceeds can be used to settle the dues.

Bajaj Hindustan’s thermal power project at Lalitpur supplies electricity to the state power utility under a power purchase agreement.

The Bajaj Group sugar mills in the state collectively owe agricultural dues of over Rs 2,361 crore. However, the company was continuously defaulting on its liabilities, citing outstanding debts on state-owned UP Power Corporation.

The cabinet has approved the proposal of the UP Energy Department to divert the electricity supply dues of Bajaj Hindustan for payment of sugarcane farmers. Rs 1,000 crore will be paid by UPPCL in two equal installments of Rs 500 crore each.

After payment of Rs 1,000 crore, the outstanding dues on Bajaj Hindustan Group will be Rs 1,361 crore.

The cabinet has also allowed power utilities to raise Rs 8,000 crore from the capital market through floating bonds. The funds will be used to improve power distribution infrastructure in the state to ensure uninterrupted supply to consumers.

The company could not be reached for comments despite efforts till the time of going to press.

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