Tata Chemicals shares jumped over 2 per cent on Thursday after the company said its board of directors on Wednesday has accepted the recommendations to sell its urea business to Yara Fertilisers India Pvt Ltd for Rs 2,670 crore. In a BSE filing the company said, “Tata Chemicals Board of Directors on Wednesday 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 customized fertilisers, manufactured by the Company at its plants located in Babrala, Uttar Pradesh (“Urea Business”), by way of a slump sale by the Company to Yara Fertilisers India Private Limited (“Yara India”) pursuant to a scheme of arrangement (“Scheme”) approved by the Board subject to all requisite regulatory and other approvals and sanction by the High Court/ National Company Law Tribunal (NCLT) in the manner agreed by the Company and Yara.”
R Mukundan managing director, Tata Chemicals in a release 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.”
At 10.52 am, share price of the company was trading 0.19 per cent up at Rs 504.55. The scrip opened at Rs 509.45 and touched a high and low of Rs 517 and Rs 496.15 respectively, in trade so far. Later, the scrip settled the day 1.36 per cent down at Rs 496.75.
Here are few things to know about the deal
-Yara India will acquire Tata Chemicals’ business including assets, liabilities, deeds ets on a slump sale basis. Against this Tata Chemicals will get a lump sum payment from Yara India on mutually agreed terms and conditions
-The divestment deal will unlock value for Tata Chemicals and help in strenghtening balance sheet of the company
-The company believes that the deal will strengthen its fertiliser businesses as it will be exposed to International network of Yara
-Paras, TKS and Daksha will remain with Tata Chemicals