The National Company Law Tribunal (NCLT), Bengaluru Bench, has given its approval for the merger of Mangalore Chemicals & Fertilizers Limited (MCFL) with Paradeep Phosphates Limited (PPL). This significant development in the fertilizer industry comes as part of a comprehensive scheme of arrangement between the two companies.

Key Aspects of the Merger

• Share Exchange Ratio: Shareholders of MCFL will receive 187 equity shares of PPL for every 100 shares held.
• Appointed Dates: The scheme involves two appointed dates:
  1. Appointed Date 1: For share transfer (Effective Date 1)
  2. Appointed Date 2: April 1, 2024, for the amalgamation

Financial Implications

• Share Transfer: Identified shares will be transferred at Rs. 144.00 per share.
• Total Consideration: The aggregate cash consideration for the share transfer is set at Rs. 418.14 crores.

Employee Considerations

• All MCFL employees will be absorbed by PPL.
• Terms of employment will be no less favorable than current conditions.

Regulatory Approvals and Process

• The scheme was approved by equity shareholders, secured creditors, and unsecured creditors with the requisite majority on June 16, 2025.
• The merger will become effective upon filing certified copies of sanction orders with the Registrar of Companies.

NCLT Order Details

The NCLT order, dated September 24, 2025, provides several directives:

1. The Petitioner Company must deliver a certified copy of the order to the Registrar of Companies, Karnataka within 30 days for registration.
2. A deposit of Rs. 1,00,000 to be made with the Pay & Accounts Officer, Chennai, and Rs. 25,000 to The Prime Minister's National Relief Fund.
3. Compliance with Section 170A of the Income Tax Act, 1961 is mandated.
4. The Petitioner Company is directed to surrender its PAN within one month of scheme approval.

Implications and Undertakings

• The merger is subject to all provisions under the Income Tax Act, 1961 and the Companies Act, 2013.
• Various undertakings have been given by the Petitioner Companies in response to observations made by regulatory bodies.

This merger represents a significant consolidation in the fertilizer sector, potentially leading to operational synergies and a stronger market position for the combined entity. Stakeholders will be watching closely to see how this merger impacts the competitive landscape of the industry.

Mangalore Chemicals & Fertilizers Limited (MCFL) has made a strategic move to strengthen its position in the fertilizer industry by acquiring a Single Super Phosphate (SSP) plant from Zuari Agro Chemicals Limited (ZACL). The Board of Directors of MCFL approved the acquisition on August 8, 2025, in a deal valued at INR 72.75 crore.

Acquisition Details

The acquisition includes a granulated single super phosphate plant and related assets located in Mahad, Maharashtra. The SSP fertilizer business being acquired has an installed capacity of 200,000 TPA (Tonnes Per Annum). However, the plant's recent performance has been affected by lower capacity utilization, resulting in a turnover of INR 47.80 crore in FY 2025.

Strategic Implications

This move is expected to have several positive impacts on MCFL's business:

1. Product Diversification: The acquisition will expand MCFL's product portfolio, adding SSP to its existing range of fertilizers.
2. Market Potential: SSP is emerging as a viable alternative to DAP (Diammonium Phosphate) for specific crops, potentially opening new market opportunities.
3. Financial Growth: MCFL anticipates that this acquisition will boost both turnover and margins through an enlarged product basket.

Transaction Details

Related Party Transaction

It's worth noting that this acquisition is classified as a related party transaction, as MCFL is a subsidiary of ZACL. However, the company has stated that the transaction is being conducted at arm's length, ensuring fairness and transparency.

Historical Context

The SSP business being acquired has faced challenges in recent years. The turnover fluctuated between INR 146.00 crore and INR 47.80 crore in the last three years, with variations attributed to different levels of capacity utilization influenced by geopolitical conditions.

Looking Ahead

As MCFL integrates this new acquisition into its operations, industry observers will be watching closely to see how the company leverages the SSP plant to enhance its market position and financial performance. The success of this strategic move could potentially set a precedent for further consolidation in the Indian fertilizer industry.

The completion of this transaction remains subject to necessary regulatory approvals, including the transfer of leases and fertilizer licenses. MCFL expects to finalize the acquisition within the next three months, marking a significant step in its growth strategy within the competitive fertilizer market.