Tata Chemicals to sell urea business to Yara for Rs 2670 crore; shares jump by 9%
The company said that the divestment of the urea business, will unlock value for them and strengthen the balance sheet.
The Board of Directors of Tata Chemicals on Wednesday accepted the recommendations to sell the company's Urea business in Babrala, Uttar Pradesh to Yara Fertilisers India for Rs 2670 crore. Following the news, the shares of the company jumped over 9%.
At 1347 hours the shares of the company were trading at Rs 505.20 per piece, or up by 9.11% on BSE.
"The Urea Business along with the assets, liabilities, contracts, deeds etc., shall be transferred and vested with Yara India pursuant to the Scheme becoming effective on a slump sale basis i.e., in exchange of a lump sum consideration to be paid by Yara India to the Company, on the terms and conditions as agreed between by the Company and Yara", the company said in a regulatory filing.
The company alerted that it will continue to own brands like Paras, TKS and Daksha and this transaction does not include speciality products and complex fertilizers.
As per the filing to Exchange, the company said that the divestment of the urea business, will unlock value for them, strengthen balance sheet and will help to pursue growth potentials and opportunities in line with its strategic directions.
Speaking on the occasion R. Mukundan MD, Tata Chemicals commented that, "This marks a decisive move on the part of the company to move forward on its strategy to build consumer business while maintaining leadership in Inorganic chemicals Business and focusing the farm business through its subsidiary Rallis and Metahelix. The company is pleased to have found a strong partner to parent its Urea business".