Shree Renuka falls as Brazilian subsidiary files for protection under judicial recovery

NEW DELHI: Shares of Shree Renuka Sugar closed with losses of 3.10 per cent at Rs 7.49 on Tuesday after the company announced that its Brazilian subsidiary Shree Renuka do Brasil Participacoes (SRDBPL) along with other subsidiaries (collectively Renuka Brazil) has filed for protection under the judicial recovery law (11.101/2005-Recuperacao Judicial) in the designated court in Sao Paulo, Brazil.

The stock hit a low of Rs 7.31, down 5.43 per cent, on the BSE.

"We expect that the court will authorise us to continue to conduct our business as usual while we devote our efforts to find a long-term sustainable solution for capital structure," the company said in a filing to BSE.

After acceptance of the request under the judicial recovery law, Renuka Brazil will be under judiacial protection for 180 days during which it has to present a plan to the court for approval with its creditors, including banks. The company believes a reorganisation under judicial recovery is the best way to reorganise and protect its Brazilian subsidiaries and provide a path to eventual turnaround, the statement said.

Its underlying operating business has been quite steady this year with combined cane crushing of 5.7 million tonnes till September 27, 2015, the company said. The company has two subsidiaries in Brazil; Renuka do Brasil SA located in Sao Paulo and Renuka Vale do Ivai SA located in the state of Paraná.