Tata Chemicals on Friday said it has completed the sale of its urea fertilisers business to Yara Fertilisers India for Rs 2,682 crore.
Tata Chemicals on Friday said it has completed the sale of its urea fertilisers business to Yara Fertilisers India for Rs 2,682 crore. The deal included transfer of all assets and liabilities (working capital) of the Babrala plant in Uttar Pradesh.
It is the first foreign direct investment in the highly regulated urea sector. In a regulatory filing, Tata Chemicals said, "The sale and transfer of urea and customised fertilisers business to Yara as contemplated in the scheme of arrangement has been completed today."
The sale has been completed after the receipt of requisite regulatory approvals, fulfilment of conditions precedent and sanction of the National Company Law Tribunal, Mumbai, it said.
The company has received the consideration of Rs 2,682 crore (subject to post completion working capital adjustments) from Yara on January 12, 2018, it added.
Separately, Yara CEO and President Svein Tore Holsether said the completion of the acquisition is a "major step forward for us as we deepen our footprint in the world’s second largest fertiliser market. We are now welcoming the opportunity to contribute with our knowledge and solutions to improve the lives of farmers in India".
With this acquisition, Yara gains a significant position in the north India with access to a strong network of 650-700 dealers. It will enable the company to provide enhanced crop nutrition solutions to farmers, Yara said.
Yara’s turnover, about USD 40 million in India currently, will increase to USD 350 million, it added.
The Babrala plant, which was commissioned in 1994, is the most energy efficient plant in India with energy efficiency on par with Yara’s best plants across the globe.
According to Yara, the acquired plant has an annual production of 0.7 million tonnes ammonia and 1.2 million tonnes urea. "The urea produced is allocated for states of Uttar Pradesh, Uttarakhand, Bihar, West Bengal, Punjab and Haryana and will be marketed under Yara’s global brand name for premium urea products – YaraVera," the company said.
In August 2016, Tata Chemicals had announced sale of its urea business to Yara. The sale was part of the company's plans to strengthen the fertiliser business by partnerships and/or transfer of ownership to world-class companies.Shares of Tata Chemicals closed 1.14 percent down at Rs 762.10 piece on BSE.