The cash-strapped, debt-burdened Southern Petrochemicals Industries Corporation (Spic) will soon enter into an agreement with Greenstar Fertilizers to sell its phosphatics business, including that of sulphuric acid, phosphoric acid, DAP, NPK, single super phosphate and aluminium fluoride units, situated at Tuticorin district of Tamil Nadu, for an undisclosed sum.
Interestingly, Spic group company, Sicagen India, is said to have invested R50 crore into Greenstar Fertilizers for 11% non-convertible redeemable cumulative preference share of R100 each, sources pointed out.
Greenstar was incorporated in August 2010 with an aim to distribute imported fertilisers, micro nutrients apart from entering into manufacturing of fertilisers and allied products. It is learnt that Greenstar has offices in Noida and Chennai. Promoters of Spic, including AC Muthiah, Ashwin Muthiah and Sidd Lifesciences (run by Ashwin Muthiah) together hold 48% in Sicagen India.
Asset Reconstruction Company of India (Arcil), the debt aggregator, which took over the estimated R3,000 crore debt portion of Spic a few years ago, has been involved in selling non-core businesses, stakes in JVs, bad assets and real estates of Spic to retire the high-cost debt and the decision to sell the phosphatics business is considered to be one such move by Spic.
It is believed that Spic is expected to raise not less than R300 crore out of this sale, sources said. Sicagen India is country?s leading provider of trading and marketing services for construction-related industrial and retail infrastructure.
A committee, set up to dispose the phosphatics business, has approved the sale of the same at its meeting recently. The phosphatics assets are being sold not only to bring down the company?s huge liabilities, but also to bring back its urea plant back to health, wherein Spic used to be the market leader in the southern markets for many years, sources said.
The urea plant, also situated in Tuticorin, was revived in September 2010 after over three years of closure. Spic has ensured that the business does not goes out of its hand and picked Greenstar as the suitor.
According to the sources, Spic also decided to sell its pharma business in Cuddalore, which makes pencillin-g sometime back, but met with huge protest from workers and the proposal is still pending with ARCIL. ARCIL is said to have cleared one-third of the debt portion by selling assets of Spic over the last two years or so.