Tata Chemicals has completed the sale of its urea fertilisers business to Yara Fertilisers India for Rs2,682 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 (FDI) in the highly regulated urea sector. Yara Fertilisers India is a subsidiary of Norway-based Yara International ASA.
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 (NCLT), Mumbai, it said.
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The company has received the consideration of Rs2,682 crore (subject to post completion working capital adjustments) from Yara on 12 January 2018, it added. Speaking to reporters in New Delhi, Yara International CEO and president Svein Tore Holsether said: “Investing in the new country is always exciting...India is the second largest fertiliser market in the world and we are now here with this acquisition to deepen our footprint. So, this is definitely a major step for us as a company.”
The company aims to contribute with its knowledge and solutions to improve the lives of farmers in India, he said. 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, he said in a statement.
Yara’s current turnover of $40 million in India will increase to $350 million, he 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 tonne ammonia and 1.2 million tonne 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% down at Rs762.10 piece on BSE.