Shree Renuka Sugars, the biggest Indian refiner, filed for bankruptcy protection in Brazil as a slump in sugar prices and a weakening real widened losses. The shares fell the most in three weeks in Mumbai trading.
Shree Renuka do Brasil Participacoes and subsidiaries will be under court protection from creditors for 180 days if the court accepts its request, the company said in an exchange filing. The company said it expects the court will authorize it to continue its business as usual while it seeks a long-term sustainable solution for its capital structure.
Shree Renuka “believes that reorganization under judicial recovery is the best way to reorganize, protect our Brazilian subsidiaries and provide a path to our eventual turnaround in Brazil,” the company said.
Drought and frost, a cap on domestic ethanol prices, lower global sugar prices and the weakening of Brazil’s currency made its debt “unsustainable,” Shree Renuka said in an e-mailed response to questions.
Losses at Shree Renuka and its units widened to 18.1 billion rupees in the year ended 31 March from 14.8 billion rupees a year earlier, according to data on company’s website.
Shree Renuka’s shares tumbled as much as 5.2 per cent to 7.30 rupees, the most since 4 September, before trading at 7.45 rupees by 10:25 a.m. in Mumbai. The shares have slumped 51 per cent this year, extending losses in the past two years.
Bloomberg News, edited by ESM