New Delhi: Tata Chemicals on Wednesday announced sale of its urea business to Yara Fertilisers India Pvt Ltd for Rs 2,670 crore.
The Board of the company at its meeting today "considered and accepted the recommendations of the Committee of Directors as well as the Audit Committee, for the transfer of the business of sale and distribution of urea and customised fertilisers, manufactured by the company at its plants located in Babrala, Uttar Pradesh, by way of a slump sale to Yara Fertilisers India Pvt Ltd," Tata Chemicals said in a statement.
The deal is subject to all requisite regulatory and other approvals and sanction by the High Court/ National Company Law Tribunal (NCLT).
"The urea business along with the assets, liabilities, contracts, deeds etc, shall be transferred and vested with Yara India pursuant to the Scheme of Arrangement becoming effective on a slump sale basis i.e, in exchange of a lump sum consideration to be paid by Yara India," the statement said.
The sale consideration is Rs 2,670 crore, "subject to certain adjustments after closing, as agreed between the parties in terms of the definitive agreements and the Scheme", it said.
"The divestment of the urea business by Tata Chemicals will unlock value for the company, strengthen its balance sheet and will help to pursue growth potentials and opportunities in line with its strategic directions," Tata Chemicals said.
The sale is part of the company's plans to strengthen the fertiliser business by partnerships and/or transfer of ownership to world-class companies.
"The urea business will now have the benefit of international network of Yara and its global expertise," it said.
Tata Chemicals will continue to own the brands Paras, TKS and Daksha.
The transaction does not include specialty products and complex fertilisers.
R Mukundan, Managing Director, Tata Chemicals, said "This marks a decisive move on the part of the company to move forward on its strategy to build consumer business while maintaining leadership in inorganic chemicals business and focusing the farm business through its subsidiary Rallis and Metahelix. The company is pleased to have found a strong partner to parent its urea business."
(This story has not been edited by NDTV staff and is auto-generated from a syndicated feed.)
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