BHUBANESWAR: Tata Chemicals finally exited from its troubled fertiliser business with the sale of its phosphatic fertiliser business to IRC Agrochemicals, a subsidiary of Indorama Holdings for Rs 872.84 crore.
However, the transaction value is higher than the Rs 375 crore as quoted by the company earlier in November last year.
“This is owing to higher working capital deployed in the business due to seasonal sales requirements and the level of activity in the factory,” the company said in a statement. The consideration includes Rs 572.76 crore cash and letters of credit/bank guarantees.
The transaction involves transfer of its Haldia plant with production capacity of about 1.2 million tonnes per annum, working capital and product brands, but excludes outstanding subsidy amounts.
“Tata Chemicals has sold the phosphatic fertiliser business and the trading business comprising bulk and non-bulk fertilisers by way of slump sale on a going concern,” the company said in a regulatory filing on Friday.
On completion of the transaction, the divestment business of the company stands transferred to IRC Agrochemicals effective June 1, 2018, it added.
Recently, MD & CEO, R Mukundan, said 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.
The company has plans for sustenance capital expenditure of Rs 500 crore for existing industrial chemical business.
“In addition to that, there is also growth capital expenditure for the new businesses — the nutraceutical and HD Silica business, which we are in the process of acquiring. Overall, we expect the capex for this fiscal close to about Rs 800 crore,” Mukundan added.