In June 2020, Board of Directors of Zuari Agro Chemicals Limited (ZACL), the agriculture vertical of the Adventz Group, announced their plan to sell off the company’s fertilizer plant in Goa to unlisted joint venture company Paradeep Phosphates Limited (PPL).
Though prime facie, the announcement looks like a regular re-structuring activity, minority shareholders have come forward to oppose the transaction. In this article, we have tried to cover the key aspects of the present deal as well as past re-structuring and what will remain with ZACL if the deal sails-through.
Zuari Agro Chemicals Limited (erstwhile Zuari Holdings Limited) constitutes the fertiliser operations of the Adventz Group. It is also the holding company for the other agribusiness operations of the Adventz Group.
Mangalore Chemicals and Fertilizers Limited (MCF) is a subsidiary of Zuari Fertilisers and Chemicals Limited which holds 53.03% equity shares. MCF is the largest manufacturer of chemical fertilizers in the state of Karnataka.
Paradeep Phosphates Limited (PPL), manufactures DAP and NPK fertilisers, with its plant located at Paradeep, Orissa. PPL is a joint venture between Indian Government and Zuari Maroc Phosphates Private Limited (ZMPPL), a 50:50 partnership between Maroc Phosphore S.A., Morocco and Zuari Agro Chemicals Limited. The government of India holds 19.55% of shares while 80.45 % shares are held by Zuari Maroc Phosphates Pvt Ltd.
In 2002, ZIL acquired Paradeep Phosphates Ltd through a JV company, as part of the disinvestment process of GoI.
The current Structure of PPL is as follows:
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