The Hindu Business Line : Liberty Phosphate turns active ahead of EGM

Expansion plans
To acquire Liberty Urvarak for Rs 6 crore
Udaipur unit to complete capacity expansion this month
Tungabhadra Fertilizers to be merged with itself

Kolkata , March 1

Liberty Phosphate has begun witnessing increased activity owing to its forthcoming equity issue to fund expansion plans. Ahead of its related EGM on March 6, the stock today recorded over 50 per cent jump in traded volumes on the BSE. Some 6.12 lakh shares changed hands against the 2-week average of 3.98 lakh shares.

Opening higher, the share price also remained in positive territory almost throughout the day. Touching the day's peak at Rs 45, the stock closed at Rs 41.15 (Rs 41.50).

Mr R. Dhanani, MD, told Business Line that Liberty, the largest producer of single super phosphate (SSP), planned to acquire Liberty Urvarak - an unlisted group outfit (one lakh tpa SSP unit at Nimrani, Madhya Pradesh) for Rs 6 crore.

Liberty's Udaipur plant would complete its capacity expansion, by 300 tpd to 800 tpd, at a cost of Rs 4 crore this month.

The company is also installing a sulphuric acid plant (75 t/day) at Hospet in Karnataka at a cost of Rs 4 crore. This will also generate power for its captive consumption.

Liberty would merge with itself, the MD said, another unlisted group company - Tungabhadra Fertilizers & Chemicals in 2006-07.Tungabhadra makes SSP and various grades of NPK mixed fertilisers. The book value of the company is placed at around Rs 9 crore. The proposed acquisition would be through a cash-equity deal, expected to be completed by October 2006.

Mr Dhanani also said Liberty would import ammonium sulphate (1.6 million tonne from Korea and China) in 2006-07.Removal of existing 5 per cent duty on ammonium sulphate is likely to increase profitability from the bulk import and domestic trading experiment, analysts said.

To fund the proposed projects, Liberty would issue fresh equity worth Rs 30 crore, most likely by April end.