Coromandel to merge Liberty Phosphate and Liberty Urvarak with itself

Coromandel International Ltd, a Murugappa Group company and India’s second largest phosphatic fertiliser player, has announced the merge of its two subsidiaries - Liberty Phosphate Ltd (LPL) and Liberty Urvarak Ltd (LUL) - with itself. According to a company press release, the Board of Directors of Coromandel International, and the Board of Directors of Liberty Phosphate Limited (LPL), a subsidiary of Coromandel International and LUL, a wholly-owned subsidiary of Coromandel, have 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. Public shareholders of LPL shall be issued shares in Coromandel in the ratio of 7 equity shares of Re 1 each of Coromandel for every 8 equity shares of Rs 10 each of LPL in terms of the scheme. The shares held by Coromandel and LUL in LPL shall get extinguished.
 
ALSO READ: Coromandel receives first consignment from Tunisian joint venture

Kapil Mehan, Managing Director, Coromandel, said, “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 million MT in single super phosphate (SSP) segment.”
 
Liberty group is one of India’s largest manufacturers of powdered and granulated SSP with about 14% market share. The group has 6 existing plants located in Baroda, Udaipur, Pali, Kota, Nimrani and Hospet and is expected to have installed capacity of 9.6 lakh MT and combined licensed capacity of 8.09 lakh MT. Liberty Phosphate is also setting up a 1.32 lakh MT green field SSP unit at Rae Bareli.
 
For the Financial year 2011-12, LPL reported a turnover of Rs 489 crore and net profit of Rs 54 crore. Combined revenues & net profits for all 3 entities for 2011-12 was Rs 645 crore and Rs 68 crore, respectively. LUL also has a holding of 5.01% in LPL.