Gwalior Chemical Industries today said it has entered into an agreement with German firm Lanxess for selling its chemical business for (82.4 million euro (about Rs 536 crore).
Under the agreement, Lanxess would acquire the entire chemicals business, including the manufacturing assets at Madhya Pradesh, and the wind power business located in Maharashtra and Madhya Pradesh, Gwalior Chemical (GCIL) said in a filing to the Bombay Stock Exchange.
GCIL would, however, retain the manufacturing site at Gujarat. The deal would be completed by September 30 and would be on a debt-free basis, it added.
"The equity value accruing to the company on subtraction of estimated debt and deal related expenses will be Rs 380 crore," GCIL said.
The company would invest the sale proceeds in power generation business and manufacturing of high specialty chemicals, for which products have been identified, it added.
Of the sale proceeds, GCIL would distribute Rs 100 crore among its existing shareholders, in the form of dividend payout or share buyback, the filing said.
"The shareholders will gain through cash distribution and investments in high growth businesses," GCIL Chairman Ashwin Kothari said.