Tata Chemicals Ltd has signed a pact to sell its phosphatic fertiliser business to IRC Agrochemicals Pvt. Ltd, part of Singapore’s Indorama Corporation Pte Ltd, for Rs 375 crore ($58 million).
The transaction involves transfer of Tata Chemical’s Haldia plant, its business of trading bulk and non-bulk fertilisers, along with immovable and movable property, working capital and product brands, the Indian company said in a stock-exchange disclosure. It excludes the outstanding subsidy amounts.
IRC Agrochemicals is a wholly owned subsidiary of Indorama’s Dutch unit. Indorama is owned by India-born Indonesian billionaire Sri Prakash Lohia.
The divestment is in line with Tata Chemicals’ strategic decision to focus on inorganic and speciality chemicals and foods businesses.
“This move builds on our 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,†said Tata Chemicals managing director R. Mukundan.
In August 2016, Tata Chemicals had agreed to sell its urea business to a local unit of Norwegian firm Yara International ASA for Rs 2,670 crore ($400 million).
Tata Chemicals’ speciality chemical portfolio includes sodium bicarbonate, agrochemicals and planned investments in nutraceuticals and highly dispersible silica businesses. The company’s food business include brands such as Tata Sampann and Tata Salt.
In 2016-17, its consolidated income was at Rs 13,455 crore with net profit of Rs 1,234 crore.
Singapore’s Indorama Corp has interests in manufacturing polyethylene, polypropylene, polyesters, fertilisers, textiles and synthetic disposable gloves.
Kotak Investment Banking and JM Financial Institutional Securities acted as transaction advisors to Tata Chemicals on this deal.
