Paradeep Phosphates Limited agreed to acquire Fertilizer plant in Goa from Zuari Agro Chemicals Limited (BSE:534742) for an enterprise value of $280 million (INR 21.3 billion) on June 19, 2020. Paradeep Phosphates Limited executed Business Transfer Agreement to acquire Fertilizer plant in Goa from Zuari Agro Chemicals Limited on March 1, 2021. The enterprise value is subject to customary adjustments for capex, cash, debt, cash like items, debt like items and working capital changes based on certain agreed parameters.

The transaction is expected to be funded partly from INR 10 billion on from Public issue and balance from loans and internal accruals. For fiscal year ended March 31, 2020, Fertilizer plant reported sales of INR 19.9 billion and net worth of INR -6.5 billion. The deal is subject to due diligence, statutory, regulatory and Zuari Agro shareholder approvals.

The Zuari Agro Chemicals Limited's board has given in-principle approval for the sale on strategic and financial grounds. The transaction was approved by the board of Zuari Agro Chemicals Limited. As of June 25, 2021, Fair trade regulator the Competition Commission of India  approved the proposed acquisition of the Fertilizer plant of Zuari Agro Chemicals by Paradeep Phosphates.

The proceeds from the transaction will be utilized to take care of the long term liabilities of Zuari Agro Chemicals. The business transfer agreement is expected to be executed in February 2021. The transaction is expected to complete on June 30, 2021.

Ernst & Young LLP acted as financial advisor to Zuari Agro Chemicals Limited.