Coromandel Buys 56.26 % Stake in Liberty Phosphate
Shailendra Lotlikar / 28 Jan 2013
Coromandel International is acquiring a majority stake in Liberty along with two other acquisitions that it has lined up. All of this is set to improve its bottomline going forward.
Coromandel International (CIL) is all set to acquire between a 48.62% to 56.28% stake in Liberty Phosphate (Liberty) from its promoters at Rs 241 per share. The total value of this deal will be somewhere in the range of Rs 169.17 crore to Rs 195.82 crore depending upon size of stake that will be acquired.
This will be followed by the acquisition of another 26% stake in Liberty through an open offer at the same price of Rs 241 per share. CIL will acquire 37,53,933 shares worth Rs 90.47 crore through the open offer.
On 24th January 2013, CIL had entered into a separate agreement with Liberty Urvarak and Tungabhadra Fertilizer and Chemical Company to acquire a 100% stake in both of them. CIL has agreed to pay Rs 88 crore for these two acquisitions. CIL will be spending between Rs 348 crore to Rs 375 crore for all these acquisitions.
CIL is a part of Rs 22000 crore Marugappa Group and is in four segments which include fertilizer manufacturing, crop protection, speciality nutrients and retail business. It manufactures a range of phosphatic and organic fertilizers. The company posted a net profit of Rs 68.65 crore in Q3 FY13 which is 48% lower than what it earned during the same period last year.
Liberty on the other hand is engaged in manufacturing of products like single super phosphate, nitrogen, phosphorous, MGSO4 and potassium mixture fertilizer. It is the largest manufacturer of single super phosphate in India.
These acquisitions by CIL are a part of its expansion plan. CIL is establishing a new plant at Kakinada, which will start operations by H2FY13. The company is also setting up a new single super phosphate plant in Punjab. CILs acquisition of a stake in Liberty will help widen its product range and its strong marketing network across India will add support to it. This acquisition will also help CIL to increase its market share in single super phosphate business and in other products. The existing capacity of CIL in single super phosphate is 130,000 tonnes, which will increase to 1000,000 tonnes after the acquisition. Overall the acquisitions are all set to enhance CILs bottomline going forward.
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