Sector News

Tata Chemicals mulls selling fertiliser business for $1 billion

July 1, 2015
Chemical Value Chain
Tata Group Chairman Cyrus Mistry has initiated a plan to hive off and sell the fertiliser business, housed in Tata Chemicals, in his first major restructuring move after becoming chairman in 2012. 
 
Tata Chemicals (TCL) has asked Kotak Mahindra Bank to help find strategic buyers for the business at a valuation of close to a billion dollars, said multiple sources aware of the developments. Long considered a drag on Tata Chemicals’ profitability, a divestment will help the company trim debt and focus on the high-growth consumer and industrial chemicals businesses.
 
Several domestic and global majors — including Coromandel, Deepak Fertilisers, Aditya Birla Nuvo and Morocco’s OCP, the world’s largest producer of phosphate rock and phosphoric acid — have been sounded out about the possible sale of the fertiliser unit, added one of the sources mentioned above. However, this could not be independently verified.
 
While a Tata Chemicals spokesperson said the company would not like to comment on market speculation, an OCP spokesperson said the company had “no comment” to make on the matter. Responding to queries from ET, a Deepak Fertilisers spokesperson said, “We are closely evaluating all growth opportunities in this sector. In view of certain confidentiality constraints we are unable to react to your specific queries.” 
 
Mails to Coromandel, Aditya Birla Group or Zuari did not generate a response till the time of going to press.
 
The current market cap of Tata Chemicals is Rs 10,722 crore. The stock ended 2.4 per cent up on Tuesday at Rs 420.9. 
 
> View the full article on the Economic Times website
 
By Arijit Barman, Ramkrishna Kashelkar & Baiju Kalesh
 

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