May sell Jewargi unit if right price is offered: Ugar Sugar

Ugar Sugar Work's Jewargi Unit is under losses but the unit has performed well during the season 2009-10. In spite of that there have been talks that the company is planning to sell off the Jewargi unit for a better offered price.

In an interview with CNBC-TV18's Latha Venkatesh and Gautam Broker, Prafulla Shirgaokar, Managing Director of Ugar Sugar Work spoke about the latest happenings in his company and the road ahead. Below is a verbatim transcript of the interview. Also watch the accompanying video. Q: Why are you looking to sell-off your unit? A: We have not decided to sell-off the unit. But, if we are offered a price, we do not mind parting. Q: What price you are looking at and are you close to a deal? A: If we get an attractive price only then we will think about it or else we will run it. Q: What is the ballpark price you are looking at and are you close to a deal? A: No. We are nowhere close to the deal as of now. Q: What revenue does that unit brings you? A: We crushed about 2 lakh tonne of sugarcane last year. This year, the prospects are much better and we are crushing more than 4 lakh tonne of cane. The crushing is in full swing and we have a good recovery and chain supply. The position of the new unit is also very good. Q: Why you are looking to sell the Jewargi unit? A: We have some management problems. Instead of continuing with the unit, we are planning of solve the problem. We are not stuck in any deal. Only if we get a good offer we will think about it. Q: What is the outlook for the Indian sugar situation aside of the Jewargi unit? What domestic realizations are you expecting in FY11? A: The current year, we are expecting our revenues to go down from Rs 3000 crore to Rs 2000 crore. But thanks to the government policies, the prices have been maintained. The current prices are about Rs 2800 crore plus for ordinary sugar without excise duty. If things remain good, the industry should be happy. Q: You posted losses of about Rs 2 crore to Rs 2.5 crore in the last quarter. How does it get from hereon? Will you be able to turn to black in the current quarter? A: The position is improving and we expect to turn it black in the current quarter. Last year, we had 2 to 3 different units that have created problems which I do not need to elaborate on. This year, the position is quiet satisfactory and we hope to go in plus. Q: What do will you do by way of revenues in the current year from June and September quarters? You already have about Rs 250 crore to Rs 255 crore in terms of revenue. What will the remaining two quarters yield with the given Rs 2800 price realization? A: Our revenue creating quarters are from October to December and January to March when we start our production. We have crushed about 6 lakh tonnes and hope to touch around 17 lakh to 18 lakh tonne of crushing. Q: Currently, what are the debts on the books and are you looking to retire some of your debts this year? A: We have a total debt of around Rs 250 crore including bank loans. Q: Are you selling the Jewargi unit to retire your debts? A: Our management is a little difficult. This is the reason why, we were thinking of disposing of the unit. In case things go well, we will keep it with us. Q: What percentage of your output comes from the Jewargi unit? A: We get an output of 4 lakh tonne as against to the Rs 20 lakh which is 15% from the Jewargi unit. Q: You already told me about the total crushing you did or you will complete doing in the two quarters starting from October. What you are likely to book in terms of revenues? A: Revenue should be around Rs 450 crore to Rs 500 crore.