Zuari Agro Chemicals Ltd, which is part of the Saroj Poddar-led Adventz Group, has announced the sale of its fertilizer plant in Goa to Paradeep Phosphates Ltd (PPL), which is a joint venture between the company and Morocco’s OCP Group.
The Goa-based company said in a stock-exchange filing it will sell the plant to PPL for $280 million (approximately Rs 2,131.99 crore at current exchange rates). The proceeds from the sale will be used to meet the company’s long-term liabilities.
The transaction will also help the strategic objective of making PPL a large fertilizer company with access to different types of products and markets that Zuari services. The deal is subject to both due diligence and regulatory approvals.
Currently, Zuari Agro and OCP each hold 50% of the equity capital of Zuari Maroc Phosphates Pvt. Ltd (ZMPPL), which in turn holds an 80.45% stake in Paradeep Phosphates.
According to VCCEdge, the data research arm of Mosaic Digital, PPL reported consolidated net sales of Rs 4,357.91 crore for the 2019 financial year, with profit-after-tax figures of Rs 158.96 crore for the same period.
OCP to invest in ZFL
Separately, Zuari Agro said that OCP Group has made an offer to invest $46.5 million (around Rs 353.85 crore) in the share capital of Zuari Farmhub Ltd (ZFL), a wholly-owned subsidiary.
ZFL handles business operations such as retail, speciality nutrients, crop protection chemicals, seeds and blended fertilizers. Zuari Agro initially transferred these operations to ZFL in March this year through a slump sale arrangement for a consideration of Rs 785.56 crore.
According to its website, the Morocco-based OCP says it holds a 31% global market share in the phosphate segment, and that it is also a major player in the fertilizer space. It employs over 21,000 people and its products include phosphoric acid, phosphate rocks, animal feeds and solubles fertilizers, among others.
The moves come even as Zuari reported a consolidated total income of Rs 5,067 crore, with a loss of Rs 765.92 crore for 2020 fiscal. Shares of the company were trading 4.02% down at Rs 111.10 apiece at the time of writing this report.