Aarti Industries to receive upto USD 130 mn for termination of LT contract by customer

Aarti Industries announced that it had entered into a 10-year contract with a Global Agrochemical Major, (hereinafter termed as Customer) to supply a high-value agrochemical intermediary with application into Herbicides. The end-use is amongst the major growth initiative of the Customer with a significant amount being invested by the Customer for this purpose. The contract was expected to generate revenue of apprx. Rs. 4000 crores over the 10 year period.

On 15 June 2020, the company has received a notice from the Customer, opting to terminate the said contract. Upon the triggering of this termination event, the guarding provisions for compensation under the contract come into effect. As a result, the compensation to AIL is estimated to be in the range of USD 120 mn to USD 130 mn.

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