InvestorQ : Why has Zuari Agro sold its fertilizers plant to Paradeep Phospates?
Archita Jajjoo made post

Why has Zuari Agro sold its fertilizers plant to Paradeep Phospates?

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Niti Shenoi answered.
3 months ago
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Zuari Agro Chemicals has approved the sale of its fertilizer plant that is located in Goa to its joint venture, Paradeep Phosphates, for a total consideration of $280 million or approximately Rs.2028 crore in local currency. The sale has been approved by the board of directors of Zuari Agro Chemicals as a going concern business on slump sale basis.

Paradeep Phosphates will be financing the acquisition of the entire fertilizer business with a combination of equity, debt and internal accruals. On the other hand, Zuari Agro Chemicals will use the proceeds of this sale to defray a chunk of its long-term debt. The problem gets compounded for the company because the Goa unit already has a negative net worth of Rs.650 crore.

The Goa unit manufactures urea, DAP and various grades of NPK fertilizers. NPK is the abbreviation for Nitrogenous, Phosphatic and Potassium-based fertilizers. Deal will be completed in all respects by the end of the month of February 2021. Paradeep Phospates Ltd is a joint venture between Zuari Agro Chemicals and the Morocco-based OCP Group.

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