Coromandel International in pact to buy Liberty Phosphate group
MUMBAI (Reuters) - Coromandel International (CORF.NS) said it has signed a definitive agreement to buy a controlling stake in fertiliser maker Liberty Phosphate Ltd LIBP.BO and two of its affiliates for up to 3.75 billion rupees to strengthen its soil nutrients business.
Coromandel will buy the founders' stake of 56.28 percent in Liberty Phosphate for 241 rupees a share. It has also made an open offer to public shareholders of Liberty Phosphate for an additional 26 percent at the same price, it said in a filing with the Bombay Stock Exchange.
The acquisition will raise Coromandel's single super phosphate (SSP) capacity to over one million tonnes from the present 130,000 tonnes, the company said in a separate statement.
Coromandel will also buy 100 percent equity in Liberty Urvarak Ltd and Tungabhadra Fertilizers & Chemicals Co through separate agreements, it said.
Single super phosphate or SSP is obtained through a chemical reaction between rock phosphate and sulphuric and is a cheaper alternative to the popular diammonium phosphate. It helps treat sulphur deficiency in soil and enhances yield of crops such as oil seeds, pulses, sugarcane, fruits and vegetables.
Liberty Phosphate and its affiliates clocked a combined net profit of 68 million rupees on sales of 6.45 billion rupees in the fiscal year 2011/12, Coromandel said, adding it would fund the acquisition through internal accruals.
Shares in Coromandel International were down 6.8 percent at 11:25 a.m. while Liberty Phosphate was up 3.45 percent.
(Reporting by Kaustubh Kulkarni in MUMBAI; Editing by G.Ram Mohan)
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