The Andhra Pradesh government has taken a key decision on eight loss-making cooperative sugar factories that have been struggling for years with financial difficulties, mounting debts and pending salary payments to employees.
As part of the latest move, the government has decided to directly initiate the liquidation process for three sugar factories, while a decision on another five factories will be taken after the High Court delivers its orders. The government has also directed that the proceeds from the sale of factory assets be used to clear outstanding loans, employee dues and other financial liabilities.
Three Sugar Factories to Enter Liquidation
According to the details mentioned in the government order, three cooperative sugar factories have been brought under the liquidation process without waiting for further action following High Court proceedings.
The three factories are:
- Sri Vijayarama Gajapathi Cooperative Sugars, Bhimasingi
- Etikoppaka Cooperative Agricultural and Industrial Society, Darlapudi
- Tandava Cooperative Sugars, Payakaraopeta
The government plans to initiate the process of dealing with the assets, liabilities and pending employee dues of these factories.
The proceeds generated through the sale of the factories’ assets will be used to settle pending payments, including dues to sugarcane farmers, employee salaries and other financial liabilities.
Employee Dues and Loans to Be Cleared
One of the key objectives of the government’s decision is to use the proceeds from asset sales to settle outstanding loans, employee salary arrears and other pending liabilities.
The assets of the factories, including land and other properties, are expected to be sold, with the resulting revenue being diverted towards clearing the outstanding dues.
The government is also considering payments related to Voluntary Retirement Scheme (VRS) benefits and ex-gratia for employees.
Based on resolutions passed by the respective General Body meetings, the government has considered appointing the Joint Collectors of the concerned districts as liquidators. The liquidators would oversee the assets and liabilities of the factories until the liquidation process is completed.
Decision on Five More Factories After High Court Orders
For the remaining five cooperative sugar factories, the government has decided to take further action only after the High Court issues its orders.
The government has estimated that more than Rs 40.20 crore would be required towards employee salaries, wages, retirement benefits and other pending liabilities associated with these factories.
In the cases involving the Kovvur and Jampani sugar factories, dues amounting to Rs 26.37 crore are reportedly pending for 840 employees.
Across the other factories, the total outstanding dues reportedly stand at Rs 66.57 crore for 1,954 employees.
To address these liabilities, the government has approved a proposal to obtain a loan from APIIC. The plan is to repay the loan using the proceeds generated from the subsequent sale of the respective factory assets.
Assets Worth More Than Rs 1,300 Crore
The total value of assets belonging to the cooperative sugar factories has been estimated at more than Rs 1,300 crore, according to the details cited in the report.
The government intends to utilise the proceeds from the sale of these assets to clear outstanding liabilities.
The move brings several long-pending questions into focus. The amount that can actually be generated through asset sales, the manner in which the properties will be sold and the extent to which employee and farmer dues can be cleared will become important aspects of the process.
Chodavaram Sugar Factory Farmers Await Rs 28.43 Crore
The government has also taken a separate decision concerning the Chodavaram Cooperative Sugars in Anakapalli district.
For the 2024–25 crushing season, the factory reportedly owes Rs 28.43 crore to sugarcane farmers.
The government has initiated steps to provide loan assistance to clear these dues. The necessary process is expected to be completed so that the pending payments can be released to the farmers.
Long-Pending Crisis Enters Crucial Phase
The financial problems of Andhra Pradesh’s cooperative sugar factories have remained unresolved for several years, with accumulated debts, employee salary arrears, retirement benefits and pending sugarcane payments adding to the burden.
The latest government decision brings liquidation, asset monetisation, loan repayment and settlement of employee and farmer dues into the same process.
The immediate focus will now be on how the liquidation process is implemented, how much revenue is generated through asset sales and how quickly the pending dues of employees and farmers are settled.
For the eight cooperative sugar factories, the government’s latest move marks a significant step in addressing their long-standing financial liabilities.
