)
Liberty Phosphate Limited (LPL) and Liberty Urvarak Limited (LUL), both subsidiaries of Coromandel International Limited, will be merged with Coromandel International through a scheme of arrangement. A decision to this effect was by the their boards on Saturday.
Coromandel International, along with its wholly-owned subsidiary LUL, holds 79.62 per cent equity stake in LPL. Public shareholders of LPL would be issued shares in Coromandel International in the ratio of 7 equity shares of Re 1 each of Coromandel International for every 8 equity shares of Rs 10 each of LPL in terms of the scheme. The shares held by Coromandel International and LUL in LPL shall get extinguished.
SSPA & Co, a Mumbai-based chartered accountants firm, provided the independent valuation report and the fairness opinion was provided by Axis Capital Limited.
"The merger will provide greater operational flexibility in leveraging sales and distribution networks of both the companies besides realising synergy benefits in the areas of manufacturing, procurement and new product development. The combined entity will facilitate Coromandel to reach its vision of 1 mt (million tonne) in SSP (single super phosphate) segment," Coromandel International managing director, Kapil Mehan, said.
The LPL group is among India's largest manufacturer of powdered and granulated SSP with about 14 per cent market share. The group has six plants located at Vadodara (Gujarat), Udaipur, Pali, Kota (Rajasthan), Nimrani (Madhya Pradesh) and Hospet (Karnataka) and has a combined licensed capacity of 809,000 tonnes.
LPL is also setting up a 132,000 tonnes greenfield SSP unit at Rae Bareli. In 2011-12, LPL reported a turnover of Rs 489 crore and a net profit of Rs 54 crore.
Coromandel International is India's second largest phosphatic fertiliser player and is in the business segments of fertilisers, specialty nutrients, crop protection and retail.
The company clocked a turnover of Rs 8,560 crore during 2012-13, according to a Coromandel International press release.
