Dharani Sugars and Chemicals Ltd, headquartered in Tamil Nadu, has had its insolvency petition accepted by the National Company Law Tribunal (NCLT). Bank of India filed an insolvency petition with the NCLT for non-payment of dues totaling 28.24 crore.
Bank of India claimed in its petition that the firm possessed three integrated sugar mills with a combined crushing capacity of 10,000 tons per day, a cogeneration facility with a 35 MW power generation capacity, and a distillery with a 160 Kiloliter per day capacity. Dharani Sugars has gotten finance for projects all throughout Tamil Nadu from a consortium led by Bank of India. The account was designated a non-performing asset on 31 October 2018, and the dues had not been paid, according to the Bank of India.
The sugar sector in the state has been suffering severe problems, according to the debt-ridden company, due to the vagaries of monsoon and government regulations. Sugarcane supply had also been diminishing owing to a lack of rain. As a result, its sugarcane crushing levels have steadily decreased over the previous five years, in accordance with the sugar industry's overall downturn. As a result, the firm stated that it was unable to fulfill its loan. According to the NCLT, the company's one-time payment proposal was rejected by the consortium of lenders. It noted that the company's justifications for delaying the insolvency procedure were unacceptable.
The insolvency procedure allows for a maximum of 330 days finding a solution to save the company. And liquidation procedures against the company may be initiated, if no remedy was found.