SP Lohia family may buy Haldia fertiliser unit from Tata Chem

Indonesia-based Indorama Corp., led by the SP Lohia family, is in advanced talks to acquire the Haldia fertilizer unit of Tata Chemicals Ltd for upwards of ₹ 1,000 crore, two people aware of the development said.

Negotiations are currently 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 Yara International ASA for ₹2,670 crore. The Haldia unit, which manufactures phosphatic fertilizer, was not part of the Yara deal. The people cited above described the transaction as part of Tata group’s overall strategy of exiting or capping investments in certain businesses.

An email sent to Indorama had not elicited a response as of press time. A Tata Chemicals spokesperson said in an email, “Tata 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 Tata group was looking at implementing a rationalization strategy aimed at paring debt and boosting profit margins by divesting business that are underperforming or not contributing to profits. The board of group holding firm Tata Sons Ltd had in September 2016, when Cyrus Mistry was chairman, word or words missing to devise a divestment strategy. At the meeting, Ajay Piramal, an independent director on the Tata Sons board, even recommended forming a separate team to work on the divestment strategy. Amit Chandra and Nitin Nohria, two other directors and nominees of Tata Trusts on the Tata 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 is the world’s second largest soda ash maker.