UPL’s reorganisation is shareholder friendly as the listed company’s shareholders will get direct shares in UPL Global, a new entity that will be spun off to house the company’s merged global and local crop protection businesses as per a plan announced on Friday, said Jai Shroff, the company’s chairman and chief executive officer.
Shroff hinted that the previous structure involving UPL’s local crop protection business being housed in India and the global crop protection business being housed in an overseas entity was not the ideal corporate structure.
“This will be shareholder friendly. UPL India and UPL Global was causing confusion for shareholders. India is a much more appreciated market today,” said Shroff.
Shroff said that there has been volatility in the global crop protection business and general global volatility, and combining the global business with the India business was in that backdrop.
“Investors who want to invest in Brazil, Africa, US can get that exposure through this company (new listed entity). It presents good opportunities for various types of investors including family offices,” said Shroff.
The reorganisation announced on Friday is almost a reversal of a corporate structure that was created through an earlier reorganisation of UPL in 2022. As per that reorganisation, the global crop protection business was parked in an overseas entity called UPL Cayman Ltd and the local crop protection business was parked in an Indian entity called UPL SAS.
UPL has been contending with the challenge of debt reduction after it acquired Arysta Crop Sciences for $4.2 billion in 2018. It has ₹30,000 crore debt. That acquisition was supported by $1.2 billion of funding from Abu Dhabi Investment Authority and TPG. They were given 22% stake in UPL Cayman Ltd in lieu of that funding support.
Source: Economic Times