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AP approves Coromandel bid for Godavari Fertiliser stake

Our Bureau

HYDERABAD, July 4

WITH the last of the hurdles in the form of a legal wrangle with Krebs Biochemicals Ltd (KBL) bid now put behind, the Andhra Pradesh Government on Friday approved the offer of Coromandel Fertilisers Ltd, a Murugappa group company, as the preferred bidder for State's 25.88 per cent stake in Godavari Fertilisers and Chemicals Ltd (GFCL).

The State Cabinet Sub-Committee, which met here on Friday, approved Coromandel as the preferred bidder and accepted the share price of Rs 124 offered by the company for the 25.88 per cent stake in the GFCL, Mr Deepak Kumar Panwar, Principal Secretary to the AP Government, Public Enterprise Department and Chairman of Implementation Secretariat, said.

While accepting the recommendation of the Implementation Secretariat (IS), the independent body overseeing the public enterprise reform process in the State, to chose Coromandel as the preferred bidder, based on the share price offered by the other two bidders, the Cabinet Sub-Committee directed the IS to expedite the process including the follow-up action of entering into a share purchase agreement.

Against Foskor's offer of Rs 96 per share, the third bidder was willing to offer only Rs 70 per share. At the offer price of Rs 124 by Coromandel, the Government will receive Rs 102.67 crore for its 82,80,000 shares in GFCL. The Cabinet Sub-Committee decision comes in the wake of removal of all legal hurdles after Krebs Biochemicals, one of the unsuccessful bidders, withdrew its petition challenging its elimination on technical grounds.

Set up in 1981 in Kakinada, the GFCL unit has a capacity of 8.32 lakh tonnes per annum of chemical fertilisers and a bio-fertiliser plant of 300 mt per annum besides a pesticide plant of 1,200 kl. The company enjoys a market share of about 68 per cent in the di-ammonium phosphate (DAP) market in Andhra Pradesh and accounts for substantial presence in almost 10 other States of India, including Madhya Pradesh, Maharashtra and Karnataka. GFCL has a 2,000-strong dealership network across the country and is expected to bring in synergies for Coromandel.

Alongside, the State Cabinet-Sub Committee also decided to downsize the Federation of Sericulturists and Silk Weavers' Cooperative Societies Ltd (SERIFED). Further, it was decided to review the performance of SERIFED after one year and take a decision on the reform option of winding it up, Mr Panwar stated in a communiqué.

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