Nagarjuna Fertilizers to merge with group company

KVVV Charya

Hyderabad, Aug 28: IN a bid to offer value-added multi-product package to the farmer community, Hyderabad-based Nagarjuna Fertilizers and Chemicals Ltd (NFCL) has proposed to merge with Nagarjuna Corporation Ltd (NCL), a new company promoted recently by Rs 3,000 crore Nagarjuna group.

The board of directors, which met here on Tuesday, approved the merger proposal subject to necessary approvals. The swap ratio is fixed at 1:1 by Deloitte Haskins and Sells, which has prepared the scheme of merger and the restructuring of both business and debt. The paid-up capital of the company is at Rs 416.61 crore.

“We want to move from a single-product company to a multi-product enterprise and propose to offer value-added knowledge-intensive products to the farmer community,” Mr KS Raju, NFCL managing director told The Financial Express.

Mr Raju, however, refused to elaborate the product areas the company plans to enter, and added that “We have yet to decide on that, but it will be knowledge-driven, high quality and value-added products which the farmer has a right to have”. Besides, the new company is aimed to counter the risk of the urea business and hedge the risk with other business in the group, Mr Raju explained. NCL will be the new flagship company into which other agri-related business of the group will be selectively merged, Mr Raju added. “We are also working out restructuring of the debt and obtaining for extended periods, besides going through the organisational restructuring for regrouping the related businesses under one roof”, Mr Raju said.

The company has extended the financial year by three more months to June 30 2001, in view of large amount of subsidy claims of the company, which is yet to be settled by the central government, said the company sources.

The Nagarjuna group, which is coming out of finance and aqua business, is, however, pursuing the 1,000 mw power plant in Karnataka and Oil refinery in Tamil Nadu. The global consultants Deloitte Haskins and Sells is working on the recast proposals.