UPL Restructures Business Into Four Units, Raises $500 Million From Global Funds

Fertiliser maker UPL Ltd. said it will restructure its major businesses into four separate units to simplify the group structure, while raising funds from global investors.

The Mumbai-based agrochemicals producer said it will hive off the four "pure-play platforms", according to its filing. The inflows from sale of minority stakes in the units will be partly used to repay debt.

• India crop protection, digital business: UPL to transfer its crop protection business on a slump-sale basis to UPL Sustainable Agri Solutions, which will house ‘Nurture AgTech' platform. Abu Dhabi Investment Authority, Brookfield and TPG will invest Rs 1,580 crore ($200 million) in this business for a 9.09% stake at an equity valuation of Rs 17,380 crore ($2.2 billion).

• Global crop protection, biosolutions: UPL's global crop protection platform (excluding India) will be housed under UPL Ltd., Cayman. ADIA and TPG to sell their 22.2% holding in UPL Corp. to UPL Ltd. Cayman for $241 million.

• Global seeds platform: UPL's seed business will be transferred to a new company named Advanta Enterprises Ltd. This is incorporated in India as a wholly owned subsidiary of UPL Ltd. UPL Corp. to divest ‘international seeds business' to Advanta Enterprises, while it continues to own 100% of the ‘other global business'. KKR will invest Rs 2,460 crore ($300 million) in Advanta for 13.33% at a valuation of Rs 18,450 crore ($2.25 billion).

• Manufacturing, specialty chemicals: The India manufacturing operations and global specialty chemicals business will remain under UPL Ltd.

• Other global non-crop business of Decco, animal health, and health and nutrition will continue to be owned by UPL Corp., a 100% subsidiary of UPL Ltd.

The company, in a press release, said creating pure-play platforms will help "unleash growth potential of each independent platform." The plan also enables "efficient capital allocation", it said.

The realignment is expected to be completed over the next 45-90 days, subject to customary closing conditions and required approvals.

The restructuring will "bring in enhanced focus, ensure better allocation and utilization of resources", said Jai Shroff, global chief executive officer at UPL.

This has enabled "fair value recognition of each individual platform with investments from distinct marquee global investors resulting in significant unlocking of value for UPL's existing shareholders", he said.

Gaurav Trehan, partner and chief executive officer at KKR India, said he looks to collaborate with Advanta "to further expand its business regionally and globally, including through bolt-on acquisitions, and maximize the company's growth potential".