Liberty Phosphate jumps on favourable swap ratio for merger with Coromandel International

Liberty Phosphate was locked at 5% upper circuit at Rs 152.15 at 12:33 IST on BSE after the board of directors of the company and Coromandel International separately approved merger of the company with Coromandel through a Scheme of Arrangement.

The announcement was made on Saturday, 28 September 2013.

Shares of Coromandel International were down 1.87% at Rs 225.60.

Meanwhile, the S&P BSE Sensex was down 252.88 points or 1.28% at 19,474.39.

On BSE, 928 Liberty Phosphate shares changed hands as against average daily volume of 19,040 shares in past one quarter.

The stock opened with an upward gap, surging by the maximum 5% daily circuit and remained locked at the 5% level at Rs 152.15 so far in the day. The stock had hit a record high of Rs 229.75 on 20 February 2013. The stock had hit a 52-week low of Rs 75.50 on 8 August 2013.

The stock had outperformed the market over the past one month till 27 September 2013, surging 47.31% compared with the Sensex's 9.79% rise. The scrip had also outperformed the market in the past one quarter, jumping 56.36% as against Sensex's 4.51% rise.

The small-cap company has equity capital of Rs 14.44 crore. Face value per share is Rs 10.

The board of directors of Coromandel International (Coromandel) and Liberty Phosphate (LPL), a subsidiary of Coromandel, and Liberty Urvarak (LUL), a wholly owned subsidiary of Coromandel, at their meetings held on Saturday, 28 September 2013, approved the merger of LPL and LUL with Coromandel through a Scheme of Arrangement, subject to approval of the stock exchanges, shareholders, creditors, concerned High Courts/Tribunal, and other regulators as applicable.

Coromandel, along with its wholly owned subsidiary LUL, holds 79.62% equity stake in LPL. As per the swap ratio for merger, public shareholders of LPL will be issued shares in Coromandel in the ratio of seven equity shares of Re 1 each of Coromandel for every eight equity shares of Rs 10 each held in LPL. The shares held by Coromandel and LUL in LPL will be cancelled. In terms of the scheme, LPL and LUL will be amalgamated with Coromandel, followed by the dissolution of LPL and LUL.

Coromandel had announced the acquisition of promoters' stake in LPL last year. On 7 March 2013, the company reconstituted the board of LPL and took control of the management of LPL. Coromandel also acquired 100% equity shares of Liberty Urvarak (LUL) from its shareholders

Liberty Phosphate's consolidated net profit fell 77.8% to Rs 1.39 crore on 41.2% decline in net sales to Rs 67.98 crore in Q1 June 2013 over Q1 June 2012.

LPL and LUL manufacture Single Super Phosphate (SSP) grade fertilisers with 5 manufacturing facilities spread across the States of Gujarat, Madhya Pradesh, Rajasthan and Uttar Pradesh. Coromandel has multi-locational production facilities and manufactures and markets a wide range of Phosphatic Fertilisers, Crop Protection Products, Speciality Nutrients like Sulphur Pastelles, Water Soluble Fertilisers, Micro Nutrients and Organic Fertilisers. Coromandel also provides agri input solutions to the farmers and offers life-style products through its rural retail centers.

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