Tata Chemicals has sold its phosphatic fertilizers business to IRC Agrochemicals, a subsidiary of IndoRama for Rs. 375 crore to exit fertilizer business completely.
Last August, Tata Chemicals has sold its urea business at Babrala in Uttar Pradesh to Pune-based Yara Fertilizer for a Rs. 2,670 crore.
The Board of Directors on Monday accepted the recommendations made by committee of directors for sale and transfer of phosphatic fertilizers business and the trading business comprising of bulk fertilisers and non-bulk fertilizers by way of a slump sale, on a going concern basis to IRC Agrochemicals, a wholly-owned subsidiary of Indorama Holdings BV, Netherlands (part of Indorama Corporation Pte, Singapore).
The transaction would involve transfer of Haldia Plant along with immovable, movable properties, working capital and product brands but excluding outstanding subsidy amounts, it added.
The Board 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 business transfer agreement and subject to satisfaction of conditions precedent and regulatory approvals.
The divestment by Tata Chemicals is in line with the strategic direction to focus on speciality chemical and food businesses, while maintaining leadership in inorganic chemicals and exiting the fertilizer business, it added.
The speciality chemical business of Tata Chemicals includes Sodium bicarbonate business, agrochemicals through its subsidiary, Rallis India in addition to the planned investments in the greenfield sites in Nellore for Nutraceuticals and in Dahej for the HD Silica business.
The food business of the company includes the pulses, spices and edible salt brand, Tata Salt.
Tata Chemicals is also among leading Soda Ash manufacturers in the world, with operations in India, Kenya, South Africa, UK and the US.
Indorama with its subsidiaries in Asia, Africa, CIS and the Middle East has interests in manufacturing Polyethylene, 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.
R Mukundan, Managing Director, Tata Chemicals said the move builds on earlier announcement with regard to the sale of the urea business to exit the fertilisers businesses completely. The company continues to move forward on its strategy to focus on speciality chemicals and consumer food business while maintaining leadership in Inorganic Chemicals Business, he added.
Source: The Hindu Business Line
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