Financial Daily from THE HINDU group of publications
Wednesday, May 31, 2006
Financial Daily from THE HINDU group of publications Wednesday, May 31, 2006 |
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Industry & Economy
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Fertilisers Markets - Stocks Our Bureau
Chennai , May 30 Shareholders of Tuticorin Alkali Chemicals & Fertilisers (TAC) will get five equity shares in Southern Petrochemical Industries Corporation (SPIC) for every eight shares they hold, it was decided at a TAC board meeting today. The merger of TAC with SPIC is also to be effective from April 1, 2005, subject to approvals of shareholders and the High Court of Madras.
SPIC promoters' stake
Calculations show that post-merger, the stake of promoters of SPIC will go up to 46.81 per cent from 43 per cent now. TAC, part of the Chennai-based SPIC group, mainly produces ammonium chloride - a nitrogenous fertiliser - and soda ash. The company was pushed into the red by a quirk of Government policy that withdrew subsidy on ammonium chloride while still retaining it on another nitrogenous fertiliser, urea. The proposal to merge TAC with either SPIC or Tamilnadu Petroproducts Ltd (another company of the group) was mooted several years ago. TPL was keen on taking over TAC because of synergies between the businesses of the companies — TPL mainly produces LAB, a product used in the manufacture of detergents, just as soda ash, which TAC makes. The merger of TAC with SPIC, which is under the `corporate debt restructure' mechanism of banks, is therefore noteworthy. Last year, SPIC's promoters had brought in Rs 20 crore into the company to shore up their investments in the company. Analysts believe that it is possible that the promoters might dilute their stake to the pre-TAC-merger level in course of time.
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