The G P Goenka-controlled Duncans Industries is offloading a controlling stake in its dormant fertiliser division in favour of the Jaypee group, a diversified industrial conglomerate.
A board meeting would be held on June 17 on the issue, the company informed the stock exchanges.
Duncans sources said the proposal would have to be ratified by the Board for Industrial and Financial Reconstruction (BIFR). The fertilizer division has liabilities of around Rs 560 crore, which Jaypee will take on. The Duncans stock today closed at Rs 16.26 on the Bombay Stock Exchange.
“They are taking the liabilities and will invest in modernisation of the plant,” said sources.
The plant at Panki near Kanpur was closed in 2002. In 2005, it re-opened for three months. At the time it was closed, it had a capapcity of 722,000 tonnes and accounted for 85-90 per cent of the then turnover of Rs 1,500 crore.
At present, Duncans top line is about Rs 200 crore, from plantations spread over North Bengal, which produce about 20 million kg of tea in a year.
Duncans would initially offload 50 per cent and later bring down its holding to 26 per cent. At present, the fertiliser business is a division of Duncans. It would be hived off into a subsidiary.