Indian Economy News

Deepak Fertilisers forms mining JV with Australian firm

  • Livemint" target="_blank">Livemint
  • September 8, 2014

Mumbai: Deepak Fertilisers and Petrochemicals Corp. Ltd on Friday said it has formed a joint venture with Australia's Platinum Blasting Services Pty Ltd for mining services in Brisbane.

The joint venture is executed through Deepak Fertilisers' subsidiary Smartchem Technologies Ltd, which will hold 65% stake and the Australian company the remainder.

Over the next two years, the joint venture company will invest around Australian dollar (A$) 28 million, through a mix of debt and equity, Deepak Fertilisers said in a statement. In the next five years, the joint venture company is expected to report a turnover of A$125 million, according to a Deepak Fertilisers executive, who requested anonymity.

Deepak Fertilisers has presence in farm business, mining chemicals, industrial chemicals and real estate.

The joint venture company in Australia plans to develop a full service offering including technical ammonium nitrate (TAN) supplies, storage and logistics and manufacturing of emulsion.

"With over three-and-a-half decades' experience and as globally fifth largest manufacturer of TAN, reaching out to matured global market, especially Australia is a natural and logical forward integration strategy. Apart from supplying TAN to this growing market, we intend to create an expertise in providing value added services and be an integral part of the Australian mining industry," said Sailesh Mehta, chairman and managing director, Deepak Fertilisers.

The company's shares rose 2.53% to close at Rs164 apiece on Friday on BSE, while the benchmark Sensex index lost 0.22% to close at 27,026.70 points. The announcement came after market hours.

The Australian joint venture comes at a time when Deepak Fertilisers is in the midst of launching a hostile bid to take over Vijay Mallya-promoted Mangalore Chemicals and Fertilizers Ltd through an open offer.

The corporate battle took a decisive turn on 13 May after UB Group chairman Vijay Mallya and Kolkata-based industrialist Saroj Kumar Poddar announced a joint counter-bid to take on Deepak Fertilisers, which on 23 April had launched a hostile bid.

When Poddar started acquiring equity in Mangalore Chemicals a little over a year ago, he was seen to have been brought in as a white knight to ward off other suitors such as Deepak Fertilisers. Poddar has always maintained that he wouldn't launch a hostile bid on Mangalore Chemicals, describing Mallya in interviews as a "friend".

Mallya and Poddar jointly own 38.4% of Mangalore Chemicals, according to regulatory filings. Because they need to secure only about 12% more of the company's shares to get unassailable control, the combine is seen to be ahead in the race vis-à-vis Deepak Fertilisers, which has, over the past few months, built a 25.3% stake in the company and has lately bid for 26% more. Only about 36-37% of Mangalore Chemicals' shares are widely held. The rest are with the three entities vying for control.

Disclaimer: This information has been collected through secondary research and IBEF is not responsible for any errors in the same.

Partners
Loading...