<http://www.dealcurry.com/2010067-Duncan-Industries-To-Sell-Fertilizer-Unit-To-Jaypee.htm>
*Jaypee group* is planning to buy closed fertilizer plant of *Duncans Industries *near Kanpur in Uttar Pradesh. The deal if goes through as per rumours, the plant, which has a urea production capacity of 722,000 tonnes per annum, would be hived off into a separate firm and 74% stake in it would be sold to the Jaypee Group for a token consideration of Re1. Duncans would have a put option on its 26% stake in the venture. If the deal materializes, Jaypee Group might invest at least Rs.700 Cr to enter the fertilizer business - At least Rs.580 Cr will go for settling the plant’s outstanding liabilities and around Rs.250 Cr to restart the 250-acre plot factory . Jaypee Group has been looking for several options in agri-business, including fertilizers. Duncans was once about to close a deal to sell its fertilizer unit to a Hong Kong-based private equity firm two years ago, but failed due to the regulation that required closed fertilizer units to switch over to natural gas to restart production which required more investment. Duncans had acquired the naphtha-based fertilizer plant from the erstwhile *ICI India Ltd*—a British paint maker—in 1995, and mothballed it in 2002. ICI has since been acquired by Dutch chemicals firm *Akzo Nobel NV. * Duncan couldn’t restart the plant due to two reasons: Difficult for it to infuse Rs.700 Cr. at one go and the other problem being the now-withdrawn regulation that closed fertilizer units had to switch to natural gas to restart production. The deal, however, needs the approval of the *Board for Industrial and Financial Reconstruction,* which provides protection from creditors to companies in poor financial condition. Transaction Note Duncans Industries Limited major business lies in tea production in India. It has also focused its business in power generation, chemicals, petrochemicals, and fertilizers. The urea manufacturing fertilizer plant of Duncans is located at Panki, Uttar Pradesh. The other fertilizers manufactured by the Duncan Group are potassic fertilizers and phosphatic and potassic fertilizer. The Urea plant had suspended its work in March, 2002 but resumed production on June, 2005. Recently, diversified Jaypee group with presence in power, cement, hotels and education verticals had announced to enter the healthcare sector with launching of its flagship hospital in Noida, Uttar Pradesh. Jaypee has been in the news for acquiring defunct units. Recently its cement divison *Jaypee Associates* acquired a controlling stake in *Zawar Cement’s *defunct grinding unit at Wadi, in Karnataka’s Gulbarga district. Recently in the fertlizer space, this month,* United Phosphorus Ltd *acquired mancozeb fungicide business and related assets of Dupont.* * Few months back*, Khaitan Chemicals & Fertilizers *acquired *Jairam Phosphates *fertilizer manufacturing facilities for an undisclosed sum. -- Regards Hardik Shah -- You received this message because you are subscribed to the Google Groups ""GLOBAL SPECULATORS"" group. To post to this group, send email to [email protected]. To unsubscribe from this group, send email to [email protected]. For more options, visit this group at http://groups.google.com/group/globalspeculators?hl=en.
