RIBEIRAO PRETO - Renuka do Brasil, a subsidiary of India's sugar maker Shree Renuka Sugars Ltd <SRES.NS>, has fired around 900 people from its two cane mills in Brazil and returned to owners most of the land it used to lease to plant cane, three sources close to the situation told Reuters on Tuesday.
The sources, who asked to not be named because they are not authorized to discuss the issue, said the company is struggling to keep operations after a failed attempt to auction off one of its mills in September. Renuka do Brasil, which filed for bankruptcy protection in 2015, declined to comment.
"They are speeding up land returns to owners, because they can't pay the lease," said one of the sources, adding the company cut use of land from third parties from 100,000 hectares to 30,000 hectares currently.
Shree Renuka Sugars entered Brazil's sugar sector between 2009 and 2010, buying controlling stakes in two companies which owned two mills each. The two Brazilian subsidiaries were called Renuka Vale do Ivai, operating in the Paraná state, and Renuka do Brasil, in Sao Paulo state.
The two companies ran into financial difficulties after years of low sugar and ethanol prices in Brazil, as did many other firms. Almost 80 mills closed since then.
Renuka do Brasil tried to sell one of the two mills it operates in a judicial auction in September, but the move was blocked by an injunction from Brazil's development bank BNDES, a creditor involved in the process.
A second source said Renuka do Brasil's two mills will crush only around 4.5 million tonnes of cane in the current crop, less than half their capacity.