Tata Chemicals announces sale of phosphatic fertilisers business to IRC Agrochemicals
The Board of Directors of Tata Chemicals has considered and accepted the recommendations of the Committee of Directors for sale, disposal and transfer of the phosphatic fertilisers business, and the trading business comprising of bulk fertilisers and non-bulk fertilisers (phosphatic business)
This would be by way of a slump sale on a going concern basis, by the company to IRC Agrochemicals (IRC), a wholly owned subsidiary of Indorama Holdings BV, Netherlands (part of Indorama Corporation Pte, Singapore - Indorama”) on the terms and conditions laid down in the Business Transfer Agreement (BTA).
The transaction would involve the transfer of Haldia Plant, trading the bulk and non-bulk fertilisers business along with immovable, movable properties, working capital and product brands but excluding outstanding subsidy amounts.
The lump sum consideration for the transfer of the phosphatic business of the company by way of a slump sale is Rs375 crore, subject to certain adjustments after closing, as agreed between the parties regarding the BTA.
The Board of Directors also approved the execution of definitive agreements between the company, IRC and Indorama Holdings BV, Netherlands, for the sale and transfer of the phosphatic business from the company to IRC pursuant to the BTA and subject to satisfaction of conditions precedent and all regulatory and other approvals as may be required, including the approval of the shareholders under Section 180(1)(a) of the Companies Act, 2013.
This divestment by Tata Chemicals is in line with the strategic direction of the company to focus on speciality chemical and food businesses while maintaining leadership in inorganic chemicals and exiting the fertiliser business.
The speciality chemical portfolio of the company includes the sodium bicarbonate business, Agrochemicals through its subsidiary, Rallis India in addition to the planned investments in the Greenfield sites in Nellore for nutraceuticals and Dahej for the HD silica business.
The food business of the company includes pulses and spices under the Tata Sampann brand in addition to the market-leading edible salt brand, Tata Salt.
The company is among the leading soda ash manufacturers in the world, with operations in India, Kenya, South Africa, the UK and the US.
Indorama, with its subsidiaries in Asia, Africa, CIS and the Middle East, has interests in manufacturing polyethene, polypropylene, polyesters, fertilisers (including phosphoric acid, which is a key input for the manufacture of DAP and other complex fertilisers at Haldia), textiles, and synthetic disposable gloves. It is the largest producer of fertilisers in Sub-Saharan Africa.
Speaking on occasion R Mukundan, managing director, Tata Chemicals, said that this move builds on our earlier announcement about the sale of the urea business to exit the fertilisers businesses completely. The company continues to move forward with its strategy to focus on speciality chemicals and consumer food business while maintaining leadership in the Inorganic Chemicals business. The company is pleased to have found a partner with a long-term interest in the Phosphatic and Fertiliser business who would build this Phosphatic business further.