Indorama Corp in talks to buy Haldia fertiliser unit from Tata Chemicals
MUMBAI: Indonesia-based Indorama Corp, led by the SP Lohia family, is in advanced talks to acquire the Haldia fertiliser unit of Tata Chemicals Ltd for upwards of ₹1,000 crore, two people aware of the development said. Negotiations are in the final stages and an announcement is expected in the coming weeks, the two said on condition of anonymity. The deal will mark Tata group’ s exit from the highly regulated fertilizer business.
In August last year, Tata Chemicals Ltd sold its urea plant in Babrala, Uttar Pradesh, to the Indian unit of Norway-based Ya ra International AS A for ₹2,670 crore. The Haldia unit, which manufactures phosphatic fertilis er, was not part of the Ya ra deal. The people cited above described the transaction as part of Tata group’ s overall strategy of exiting or cap ping investments in certain businesses.
An email sent to In dora ma was not answered as of press time. A Tata Chemicals spokesperson said inane mail ,“Tat a Chemicals does not respond to market speculations. As a company, we are always open to evaluating various options that could create maximum shareholder value.”
Mint reported in June that the Tat a group was looking at implementing a rationalization strategy aimed at pa ring debt and boosting profit margins by dive sting business that are under performing or not contributing to profits.
The board of group holding firm Tat a Sons Ltd had in September 2016, when Cyrus Mis try was chairman, discussed a divestment plan for non-core businesses. At the meeting, Ajay Pi ram al, an independent director on the Tat a Sons board, even recommended forming a separate team to work on the divestment strategy. Am it Chandra and Nit in Nohria, two other directors and nominees of Tata Trusts on the Tat a Sons board agreed, and suggested starting a dialogue with private equity firms, Mint reported in June, citing minutes of the meeting appended as an annexure in the petition filed by two investment companies of the Mistry family at the National Company Law Tribunal. Mistry was ousted as Tata Sons chairman in October.
Tata Chemicals, the world’s second- largest soda ash maker, had capped its investment in the fertiliser segment and restructured operations of two overseas fertiliser plants. It is one of India’s largest producers of inorganic chemicals and fertilisers.
Over the years, Tata Chemicals has expanded its operations to edible salt, phosphatic fertilisers, urea and cement. Its agri business includes crop nutrition, chemicals and pesticides.
For the In dora ma group, a deal will reinforce its presence in India, especially the eastern region, where it has been strengthening its presence.
In September last year, Indorama Ventures formed an equal joint venture with Kolka ta-based D huns eri Petro chem Ltd to produce polyethylene te rep ht ha late res ins( PET ), a raw material used in the textile and plastics industries. D huns eri Petro chem’ s PET resin business, with a 480,000 tonnes per annum plant in Haldia, was transferred to the newly formed company Dhunseri Pet-global Ltd, as per the agreement.
Mint reported in April that In dora ma was in initial talks with The Chatterjee Group (TCG) to buy as take in Hal di a Petrochemicals Ltd, in which Tata group owns a 2.3% stake, along with larger shareholders such as The Chatterjee Group and Indian Oil Corp.