Nagarjuna Fert To Merge With Ncl
The Rs 1,300 crore Nagarjuna Fertilisers and Chemicals Limited (NFCL) will be merged with Nagarjuna Corporation Ltd (NCL).
The board of directors of NFCL at its meeting today decided to merge the company with NCL, a just-created shell company. As per the merger proposal, one equity share of NCL will be allotted for every equity share of NFCL.
Effectively, the merger will just have an effect of changing the name of the company.
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The board has also taken note of the debt restructuring plan prepared by the consultancy firm Deloitte Haskins & Sells, and approved by IDBI.
As per the restructuring plan, institutions have agreed in principle to put a two-year moratorium on the Rs 1000 crore term loan. Repayments will start from April 2003 with a ten-year time schedule.
K S Raju, the chairman of Nagarjuna group, said: "We want to have a break from the past and reposition the company on a new corporate platform".
He said that " NCL will be the new flagship company into which other businesses of the group will be selectively merged in future". Apart from taking over the existing urea fertiliser business of NFCL, the newly created entity plans to introduce more value-added inputs to the agriculture sector.
"NCL would be a broad based and diversified company. We will come out with a detailed business plan in six months," Raju said adding that the merger is a first step towards consolidation of the various businesses in the group and aimed at counter the risk of the urea business.
NFCL, which has a one-million tonne per annum urea plant at Kakinada, has recorded a turnover of Rs 1378 crore for the accounting year (15 months) ended June 2001. The board will consider audited results at its next meeting scheduled to held on September 25.
Apart from NFCL, the group has a presence in agro-chemicals business. It has also taken up a 6 million tonne petroleum refinery in Tamil Nadu and a 1000 mw thermal power project in Karnataka, which were mainly responsible for the current liquidity problems of the group.