As per a regulatory filing, the board has approved the sell off ‘as a going concern and on a slump sale basis’. PPL plans to fund the acquisition by a mix of equity, debt and internal accruals.
Proceeds from the transaction will be used to ‘take care of the long term liabilities’ of Zuari Agro Chemicals, the company said in a regulatory filing. For the FY’2019-20, the net worth of the Goa unit was a negative Rs 650.15 crore.
Zuari Agro Chemicals’ board had, in June 2020, given its ‘in-principle’ approval for the sale on strategic and financial grounds. The Goa unit is engaged in the manufacture, distribution, imports and sale of urea, DAP and various grades of NPK fertilizers.
The business transfer agreement is expected to executed in February 2021, subject to due diligence and regulatory approvals. PPL is a joint venture between Zuari Agro and Morocco-based OCP Group.
The divestment of the Goa plant by ZACL is aimed at consolidating the group’s bulk fertilizer business. With this restructuring, the company now has a clearly earmarked venture into specialty nutrients and retail through its wholly owned subsidiary Zuari FarmHub Ltd and the bulk business of Goa plant and Paradeep operations consolidated under its joint venture, Paradeep Phosphates, the company said in a statement.
Going forward, the group intends to grow the bulk fertilizer business through PPL and Mangalore Chemicals & Fertilizers and the speciality business through Zuari FarmHub, it added.