Tata Chemicals Ltd has agreed to sell its urea plant in Babrala, Uttar Pradesh, to the Indian unit of Norway-based Yara International for Rs.2,670 crore, as it seeks to position itself as a maker of consumer products rather than fertilizers.
The transaction, the first cross-border deal in the fertilizer industry, doesn’t include specialty products and complex fertilizers. Tata Chemicals will continue to own the brands Paras, TKS and Daksha.
The deal will help to retire part of its debt, which amounted to Rs.8,694.25 crore on a consolidated basis as of 31 March 2016.
The urea business, along with the assets, liabilities, contracts and deeds, will be transferred to Yara Fertilizers India Pvt. Ltd on a so-called slump sale basis. Slump sale entails the transfer of one or more businesses for a lump-sum consideration without values being assigned to individual assets and liabilities.