2-year moratorium for weak sugar mills as per guidelines to restructure SDF loans


With an aim to clear the outstanding amount of default of loans of Rs 3,068.31 crore under Sugar Development Fund (SDF) Act, 1982 and to revive financially weaker but economically viable sugar mills, the Centre has come up with a set of guidelines to restructure such loans.

As on November 30, 2021, of the outstanding amount of default on SDF loans, which is Rs 3,068.31 crore, as much as Rs 1,249.21 crore is the principal amount while Rs 1,071.30 crore is interest and Rs 747.80 crore is additional interest due to default.

The Department of Food and Public Distribution issued the guidelines for restructuring of SDF Loans under Rule 26 of the SDF Rules 1983 on January 3, a release said here on Wednesday.

The complete guidelines (available at https://dfpd.gov.in/sdfguidelines-sdf.htm and at https://sdfportal.in) are uniformly applicable for SDF loans availed by all types of concerns, including Co-operative Societies, Private Limited Companies and Public Limited Companies.

The guidelines have provision for two years moratorium and then five years of repayment which is expected to provide big relief to financially weak sugar mills which have availed SDF loans.

“Waiver of additional interest in full will be given to the eligible sugar factories. The rate of interest will be changed to the interest rate as per the prevailing bank rate on the date of approval of the rehabilitation package as per SDF Rule 26 (9) (a),” the release said, adding, “These points will facilitate reduction of the debt burden over these defaulting sugar mills.”

A sugar factory that has been incurring cash losses continuously for the last three financial years or any sugar factory’s net worth is negative, and the sugar factory is not closed / has not ceased to crush cane for more than two sugar seasons, excluding the current sugar season, is eligible to apply for restructuring, it added.



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