Kanoria Chemicals & Industries Limited (KCI) announced the divestiture of its Chloro Chemicals Division situated at Renukoot to Aditya Birla Chemicals (India) Limited (ABCIL) for a cash consideration of Rs.830 crores. ABCIL is part of the Aditya Birla Group and a subsidiary of Hindalco Industries Limited.
The transaction was approved in the meeting of the Board of Directors held today in New Delhi. The business transfer agreement was executed by both the parties today. The transaction will be done by way of a slump sale and is expected to be completed by end May 2011.
Mr. R V Kanoria, Chairman & Managing Director of KCI commented, “The transaction is a win-win for both the parties as ABCIL has significant captive need for caustic soda within their Group and could also benefit from the operational synergies from similar operations across their business. The funds to be realized from the transaction will be used by KCI in expanding its other existing businesses, as well as actively seeking opportunities in new and related businesses through both organic growth and acquisitions. The land and infrastructure available at our manufacturing facility at Vishakhapatnam provides an immediate opportunity to the company to expand and diversify its business.”
He added, “Aditya Birla Group has an excellent track record in running similar businesses as well as integrating businesses they acquire. Considering these, and also the strategic need for their backward integration into chloro-chemicals, we are confident the employees and all stakeholders will continue to excel under the new management”.
The division generated revenue of Rs.303 crores and PBIT of Rs. 47 crores for the financial year ended 31st March 2010.
The transaction is subject to necessary and customary approvals.
More From This Section
SKP Securities Ltd., Kolkata was the sole advisor for the transaction.
About Kanoria Chemicals & Industries Limited
Kanoria Chemicals & Industries Limited (KCI) (BSE: 506525; NSE: KANORICHEM) is a leading manufacturer of chemical intermediates in India. Apart from the Chlor Alkali business which is being divested, KCI is a major player in organic chemicals. It has manufacturing facilities at Ankleshwar in the state of Gujarat, which manufactures Alcohol and Alcohol based intermediates; and at Visakhapatnam in the state of Andhra Pradesh, which currently manufactures Formaldehyde and will commence manufacture of Hexamine shortly. KCI enjoys leadership position in India for Pentaerythritol, Formaldehyde and Hexamine. KCI has strong corporate governance and social responsibility practices that have been widely recognized and have won the company several awards. More information about the company is available at www.kanoriachem.com.