The board of global agrochemical company United Phosphorus Ltd (UPL) on Monday has approved merger of self with Advanta Ltd.
UPL, promoter of Advanta, holds a 46.5 per cent stake in the company as on September 30.
Jai Shroff, Global CEO, UPL, and Vice-Chairman, Advanta, said: “With this merger, UPL expands its product portfolio to cover the agri-value chain and provides UPL with an opportunity to engage directly with farmers. Advanta benefits from the strong global distribution network of UPL and will be able to fast track its growth plans on the back of strong balance sheet of combined entity.”
The merger is subject to regulator approvals. According to the scheme, Advanta shareholders will get one equity share with a face value of ₹2 each and three preference shares with a face value of ₹10 each of UPL for each share held.
UPL said that the foreign currency convertible bonds issued by Advanta will get 100 UPL issued FCCBs for every 100 held. Further, holders of Advanta’s global depository receipts will get 106 UPL GDRs for every 100 held. Assuming full conversion of FCCBs, UPL will issue 77.4 million new equity shares and 181.8 million preference shares.
The merger will enable newer geographies, cross-selling opportunities, proprietary access to distributors and early engagement with farmers, and a competitive cost structure, UPL said in a presentation to its investors on Monday. Necessary approvals are expected to take 8-9 months, it added.
On Monday, UPL’s shares closed 3.50 per cent lower at ₹441.95, while Advanta’s shares gained 0.50 per cent at ₹478.55 on the BSE.