EID Parry (India) Ltd., part of the Murugappa Group, has decided to hive off its bio-pesticides and nutraceuticals business to subsidary company Coromandel International.
The city-based company has signed a term sheet to transfer its bio-pesticides business through a "slump sale" together with its entire stake in the wholly-owned subsidiary, Parry America, USA to "Coromandel International Ltd".
Coromandel International Ltd is a subsidiary of the diversified conglomerate Murugappa Group.
The "consideration for the transaction is Rs 338 crore (subject to changes in working capital as on the closing date) which includes transfer of bio-pesticides business of EID Parry together with its stake in the wholly owned subsidiary, Parry America, Inc", the statement said.
The transaction was also subject to necessary approvals including from shareholders, it said.
"The transaction is part of the strategic plan of the company to consolidate and focus on its core business in food and nutraceuticals space. Also, it would help the company to keep its gearing at a lower level to handle the sugar cyclical movements", Murugappa Group, Chairman, A Vellayan said.
The bio-pesticides business would gather growth momentum in the hands of Coromandel through their strong position in crop protection business in India, he said.
The bio-pesticides business manufactures Neem-based 'Azadirachtin Technical and Formulations', plant extract based bio-stimulants, micronutrients and microbial bio-pesticides.
It has a manufacturing, Research and Development facility in Tamil Nadu.
For 2016-17 fiscal, the bio-pesticides business reported a consolidated revenue of Rs 123 crore as compared to Rs 107 crore registered in same period last year.
EID Parry (India) Pvt Ltd., Managing Director, S Suresh said hiving off the business would help the company strengthen the balance sheet and focus on its core business effectively.
"The bio-pesticides business would be a natural fit to crop protection vertical of Coromandel due to commonality of consumers and trade channels", he said.
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