Grasim Industries Unlocks Value Divests Fertiliser Business to Indorama Corporation for Rs. 2,649 Cr.13 November, 2020
The Board of Directors of Grasim Industries Limited (“Grasim” or “the Company”), at its meeting held today, approved the divestment of the Company’s Fertiliser Business, Indo Gulf Fertilisers (“IGF”), by way of a slump sale to Indorama India Private Ltd (“IIP”), a subsidiary of Indorama Corporation Pte. Ltd, Singapore (“Indorama Corporation”). The transfer of the business will be for a lump-sum cash consideration of Rs. 2,649 Cr., to be paid by IIP to Grasim. This consideration is commensurate to the strength and future potential of the business. Indo Gulf Fertilisers is engaged in manufacturing, trading, and sale of urea and other agri-inputs with a 1.2 Mn TPA Urea manufacturing plant at Jagdishpur in Uttar Pradesh.
The divestment of the Fertiliser Business is a significant value unlocking exercise for Grasim. It will further enable the Company to pursue growth opportunities in its core businesses.
Speaking on the transaction, Mr. Dilip Gaur, MD Grasim Industries Ltd said “The divestment of the Fertiliser business by Grasim is a strategic portfolio choice and unlocks value for the shareholders. It is in line with the strategic thrust of the Company to focus on core businesses. Indo Gulf Fertilisers is synonymous with strong performance and high sustainability standards. To take it to the next level in size and value, the company is pleased to have found in Indorama Corporation, a credible fertiliser player to own IGF. IGF will benefit from synergies and expertise of Indorama Corporation’s existing agri portfolio.”
Mr. Amit Lohia, Vice Chairman of Indorama Corporation, said, “We are pleased that with this acquisition, Shaktiman and the Paras brands will be able to join hands to offer a complete range of products for our farmers including urea, phosphate fertilisers, potash, soil health products, seeds, and crop protection products. We are excited about this union and believe it will facilitate greater access and development of high quality agri inputs for the farming community.”
The Fertiliser Business shall be transferred to IIP on slump sale basis, pursuant to a scheme of arrangement. The lump sum consideration is subject to certain adjustments as agreed between the parties in terms of the definitive agreement and the Scheme. The transaction is subject to the necessary statutory and regulatory approvals including approvals of the NCLT, the Stock Exchanges, SEBI, Competition Commission of India (CCI), the respective Shareholders and lenders / creditors of each of the companies.
Advisors to Grasim Industries
Independent Registered Valuer: Ms. Drushti Desai (Partner– Bansi S. Mehta & Co.) Independent Fairness Opinion: Kotak Mahindra Capital Company Limited Legal Advisors: Cyril Amarchand Mangaldas
About Grasim Industries Ltd
Grasim Industries Limited, a flagship company of the Aditya Birla Group, ranks amongst the top publicly listed companies in India. Incorporated in 1947, it started as a textiles manufacturer in India. Today, it has evolved into a leading diversified player with leadership presence across many sectors. It is a leading global producer of Viscose Staple Fibre, the largest Chlor-Alkali, Linen and Insulators player in India. Through its subsidiaries, UltraTech Cement and Aditya Birla Capital, it is also India’s largest cement producer and a leading diversified financial services player. At Grasim, there is an endeavour to create sustainable value for 24,000+ employees, 230,000+ shareholders, society and customers. The company reported consolidated net revenue of over US$ 10.9 Billion and EBITDA of over US$ 1.9 Billion in FY 2020.
About Indorama Corporation
Indorama Corporation is one of Asia’s leading chemical holding company with its subsidiaries manufacturing fertilisers, polyethylene and polypropylene resins, medical gloves, polyester fibers and resins, spun yarns and cotton fibre. It is the largest producer of Urea and Phosphate Fertilisers in Sub-Saharan Africa, the largest producer of polyolefins in West Africa, and the third largest producer of synthetic rubber gloves in the world. Through IIP, in India, it is a leading producer of Phosphate fertilizers, marketed under the brand Paras.