Tata Chemicals, a part of the country’s second-largest business group, has hired seven banks to arrange $850 million of loans to fund the purchase of US-based General Chemical Industrial Products, according to people with direct knowledge of the deal.
The Mumbai-based company appointed HSBC Holdings, Standard Chartered, ABN Amro Holding, Calyon, Mizuho Financial Group, Rabobank Nederland and Bank of Nova Scotia to arrange the loan, which includes $500 million for seven years and $350 million of short-term borrowing, said the sources, who declined to be identified as the information was not public.
Tata Chemicals, the country’s biggest producer of salt, in January agreed to buy General Chemical for $1 billion to become the world’s second-largest maker of soda ash.
Tata Chemicals bought UK-based Brunner Mond Group in December 2005, raising its soda ash capacity to about 3 million tonnes, accounting for 8 per cent of the global market.
“This is definitely not a cheap acquisition for Tata Chemicals and it will take them a while to digest it, but for the long term, the deal will give them scale and cost efficiency,’’ said Mumbai-based Chintan Mehta, an analyst at Asit C Mehta Investment Intermediates.
Prashant Ghose, the chief financial officer at Tata Chemicals, didn’t return a voicemail message from Bloomberg News.
Tata Chemicals plans to pay interest that’s 1.35 percentage points more than the London interbank offered rate (Libor) for the seven-year loan, said sources. Three-month Libor was set at 2.94 per cent on March 7.
The company’s shares have gained 2 per cent since it announced the acquisition, outpacing Bombay Stock Exchange’s Sensex, which fell 12 per cent.
Credit rating
Moody’s Investors Service said in February it may downgrade Tata Chemicals’ credit ratings because of the likely increase in its debt. Moody’s ranks the company’s foreign-currency debt Baa3, the lowest investment grade.
The borrowing will more than double Tata Chemicals’ debt from Rs 2,040 crore ($501 million) at the end of September, according to its earnings report.
Tata Group Chairman Ratan Tata has acquired the world’s largest maker of tea and the UK’s biggest steelmaker as he uses his dominance of industries from autos to software to fund an overseas push.
General Chemical has the capacity to produce 2.5 million tonnes of natural soda ash used to make glass and detergents at its facility in Green River Basin, Wyoming.
The Tata Group had a revenue of $28.8 billion in the year ended March 31, 2007, the equivalent of about 3.2 per cent of India’s gross domestic product, according to its website.
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Monday, March 10, 2008
Tata Chemicals taps 7 banks to fund US buy
Thursday, February 7, 2008
Tata Chemicals to raise Rs 325cr
Tata Chemicals is planning to sell a part of its stake in Tata Investment Corporation to group holding company Tata Sons for up to Rs 325 crore.
According to a release issued by Tata Chemicals to the BSE today, the company is planning to sell up to 14.51% stake at a price not greater than Rs 650 and not less than Rs 600 per share on or after February 13.
Tata Chemicals holds 15.37% stake (52.97 lakh shares) in Tata Investment Corporation.
"Not less than 4,600,000 shares (13.35% of share capital) or greater than 5,000,000 shares (14.51% of share capital) are proposed for sale," the release added.
Friday, February 1, 2008
Tata Chem testing waters for biofuel foray
Tata Chemicals, one of the world’s leading inorganic chemicals manufacturers, may get into the biofuel business on a large scale if its pilot project at Nanded, Maharashtra, is successful.
“The project is on an experimental basis and we have decided to limit investments at this stage to a maximum of Rs 50 crore,” said P K Ghose, executive vice-president and CFO, Tata Chemicals.
“If the project is successful, we will invest in biofuel manufacturing in a big way. This will involve investments totalling several hundred crores of rupees.”
Tata Chemicals is setting up a pilot biofuel manufacturing unit in Nanded, which will be operational in 2008-09.
Praj Industries has been contracted to set up a 30 kilolitres a day bioethanol plant, which will use sweet sorghum as raw material for making bioethanol.
The company is also exploring options to produce biodiesel from jatropha plants. Agro-climatic trials and related studies of the crop are progressing in Maharashtra and Gujarat at five centres, according to sources.
Biofuels is an emerging business opportunity in India, thanks to the initiative taken to use ethanol as an automotive fuel.
The Mukesh Ambani promoted Reliance Life Sciences is planning a major foray into biodiesel based on jatropha, for which it is setting up a pilot facility in Kakinada, Andhra Pradesh.
Adjacent to this facility, Naturol Bioenergy Limited has started an integrated oleochemical complex to process biodiesel and allied products with a capacity of one lakh tonne a year, one of the largest in the world.
Thursday, January 31, 2008
Tata Chemicals to buy US firm for Rs 4,000cr
Tata Chemicals (TCL) has signed definitive agreements to acquire US-based soda ash maker General Chemical Industries Products Inc (GCIP) for $1.05 billion (about Rs 4,000 crore) to become the second largest producer of soda ash in the world.
The announcement was made exactly a year after Tata Steel, another Tata group company, acquired British steel major Corus.
TCL is now the third largest manufacturer of soda ash and sodium bicarbonate in the world with a production capacity of close to 3 million tonne per annum (MTPA). The acquisition will add another 2.5 MTPA to take its total capacity to 5.5 MTPA - next only to US-based FMC Chemicals.
The company had bought 63.5% stake in UK-based Brunner Mond Group for about Rs 508 crore in December 2005. It also holds a 33% stake in Indo Maroc Phosphore S.A. (IMACID), Morocco, which is engaged in the manufacture of phosphoric acid.
Soda ash contributed 40% of TCL's revenues of Rs 4,563 crore for the first nine months of 2007-08. The rest of the revenues are from its fertiliser and inorganic chemicals businesses.
"This is a historic occasion for Tata Chemicals. The acquisition will help us access markets in North America, Latin Americ and the Far East," said Homi Khusrokhan, managing director, TCL, at a press conference in Mumbai today.
GCIP's subsidiary General Chemical (Soda Ash) Partners (GCSAP) has mining and manufacturing facilities located at Green River basin in Wyoming, USA. The Green River basin is the largest and most economical natural soda ash mine (trona) in the world. GCSAP shares the Green River basin with three other producers of soda ash, OCI Chemical Corporation, FMC Corporation and Solvay Mineral.
TCL signed an agreement to acquire 100% equity of the privately held GCIP from Herbinger Capital Partners, a private equity player with majority shareholding. The acquisition, subject to US regulatiory clearances, will be done through debt and equity funding, said TCL executives.
A profit-making and debt-free company, GCIP is estimated to have a turnover of over $400 million, said TCL executives.
The Gujarat-based soap and personal care producer Nirma had acquired Searles Valley Minerals (SVM), one of the top five producers of natural soda ash in the US with a turnover of $ 300 million, in November 2007.
Wednesday, January 30, 2008
Q3 Results Update - Part 1
Bajaj Auto Q3 consolidated net down 17%
Bajaj Auto today reported a 16.60% decline in consolidated net profit at Rs 273.82 crore for the quarter ended December 31, 2007 when compared with Rs 328.35 crore in Q3FY07.
According to a release issued to the Bombay Stock Exchange, net sales and income from operations declined to Rs 2,633.26 crore for the quarter ended December 31, 2007 from Rs 2,696.03 crore for the quarter ended December 31, 2006.
The company, on a standalone basis, reported a 5.32% decline in net profit at Rs 326.81 crore for the quarter ended December 31, 2007 as against Rs 345.19 crore in Q3FY07.
Total income declined from Rs 2,729.18 crore for the quarter ended December 31, 2006 to Rs 2,680.35 crore for the quarter ended December 31, 2007.
Sun Pharma Q3 net up 60%
Sun Pharmaceutical Industries today reported a 60.09% increase in net profit after minority interest at Rs 318.35 crore for the quarter ended December 31, 2007 as compared to Rs 198.85 crore in Q3FY07.
According to a release to the BSE, the company's total income has increased to Rs 821.88 crore for the quarter ended December 31, 2007 from Rs 603.59 crore for the quarter ended December 31, 2006 .
Mahindra & Mahindra PAT up 68%
Mahindra and Mahindra today announced a 67.63% increase in profit after tax (PAT) on a stand-alone basis at Rs 405.15 crore for the quarter ended December 31, 2007 as against Rs 241.68 crore in Q3FY07.
According to a release to the BSE, the company's total income increased to Rs 2,980.25 crore for the quarter ended December 31, 2007 from Rs 2,617.30 crore for the quarter ended December 31, 2006
Aurobindo Pharma net dips 8%
Hyderabad-based generic pharmaceuticals and active pharmaceutical ingredients (APIs) manufacturer, Aurobindo Pharma, witnessed a slight decline of 8% in net profit at Rs 55.25 crore for quarter ended December 31, 2007 when compared with Rs 60.12 crore in Q3FY07.
The company's total income grew 7.35% to Rs 549.52 crore for the quarter ended December 31, 2007 from Rs 511.86 crore for the quarter ended December 31, 2006.
Tata Chemicals Q3 PAT dips 42%
Tata Chemicals today announced a 41.55% dip in net profit after tax (PAT) of Rs 91.09 crore for the quarter ended December 31, 2007 as compared to Rs 155.85 crore in Q3FY07.
According to a release to the Bombay Stock Exchange, the company's total income has decreased to Rs 1712.67 crore for the quarter ended December 31, 2007 from Rs 1,793.70 crore for the quarter ended December 31, 2006 .
The company has, however, on a stand-alone basis, posted a PAT increase of 7.45% at Rs 125.48 crore for the quarter ended December 31, 2007 when compared with Rs 116.77 crore in Q3FY07.
The company's total income has decreased to Rs 1,236.52 crore for the quarter ended December 31, 2007 from Rs 1,318.81 crore for the quarter ended December 31, 2006 .
