Coromandel subsidiaries to be merged with the company

CIL, along with its wholly owned subsidiary LUL, holds 79.62% equity stake in LPL

Liberty Phosphate Limited (LPL) and Liberty Urvarak Limited (LUL), both subsidiaries of Coromandel International Limited (CIL) will be merged with CIL through a scheme of arrangement. A decision to this effect has been taken by the companies’ boards on Saturday.

CIL, along with its wholly owned subsidiary LUL, holds 79.62 per cent equity stake in LPL. The public shareholders of LPL would be issued shares in CIL in the ratio of 7 equity shares of Re 1 each of CIL for every 8 equity shares of Rs 10 each of LPL in terms of the scheme. The shares held by CIL and LUL in LPL shall get extinguished, according to a CIL press release.

SSPA & Co, a Mumbai-based chartered accountants firm, provided the independent valuation report and the fairness opinion was provided by Axis Capital Limited.

“The merger will provide greater operational flexibility in leveraging sales and distribution networks of both the companies besides realizing synergy benefits in the areas of manufacturing, procurement and new product development. combined entity will facilitate Coromandel to reach its vision of 1 Mio MT (million tonnes) in SSP (single super phosphate) segment”,  CIL managing director, Kapil Mehan, said.

LPL group is amongst India’s largest manufacturer of powdered and granulated SSP with about 14 per cent market share. The group has 6 existing plants located in Baroda, Udaipur, Pali, Kota, Nimrani and Hospet and has a combined licensed capacity of 8.09 lakh tonnes.

LPL is also setting up a 1.32 lakh tonnes greenfield SSP unit at Rae Bareli.  In 2011-12, LPL reported a turnover of Rs.489 crore and a net profit of Rs.54 crore.

CIL is India’s second largest phosphatic fertilizer player and is in the business segments of fertilizers, specialty nutrients, crop protection and retail. The company has clocked a turnover of Rs. 8,560 crore during  2012-13.