Grasim Industries to sell fertiliser biz to Indorama Corp for Rs 2,649 cr

It's a slump sale and a major value-unlocking exercise for Grasim, allowing it to pursue growth opportunities in its core businesses

Aditya Birla Group's Grasim Industries, on Thursday agreed to sell its fertiliser business, Indo Gulf Fertilisers (IGF), by way of a slump sale to Indorama India Private Ltd (IIP) for a cash consideration of Rs 2,649 crore.

Under section 2(42C) of Income -tax Act 1961, a 'slump sale' means the transfer of one or more undertakings for a lump sum amount, without values being assigned to individual assets and liabilities.

IIP is a subsidiary of Indorama Corporation Pte. Ltd, Singapore (Indorama Corporation).  

Indo Gulf Fertilisers is engaged in manufacturing, trading, and sale of urea and other agri-inputs with a 1.2 million tonne urea manufacturing plant at Jagdishpur in Uttar Pradesh, informed Grasim Industries in its release.

The divestment of the fertiliser business is a significant value unlocking exercise for Grasim and will enable the company to pursue growth opportunities in its core businesses like viscose and chemicals.

 

“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,” Dilip Gaur, managing director of Grasim Industries, said.
 

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.