IN RE Vs. TATA CHEMICALS LIMITED

JUDGEMENT

(1.) Heard counsel for the Petitioner Companies and the Objector. The objections raised by the Objector will not stand in the way of sanctioning the Scheme and die objections raised by the Objector are dismissed.

(2.) The Advocates appearing for Tata Chemicals Limited (hereinafter referred to as 'Transferor Company') and Yara Fertilisers India Private Limited (hereinafter referred to as 'Transferee Company') state that the Petitions had been filed to seek sanction to the Scheme of Arrangement between the Transferor Company and the Transferee Company and their respective shareholders and creditors (hereinafter referred to as the 'Scheme of Arrangement') , pursuant to the provisions of Sections 230 - 232 and other relevant provisions of the Companies Act, 2013. The Transferor Company and the Transferee Company are together referred to as ('Petitioner Companies') .

(3.) The Transferor Company is, inter alia, engaged in the business of manufacturing and sale of fertilizers including bulk and customized fertilizers. The Transferee Company is primarily engaged in the business of import, sale and distribution of plant nutrition products in India. The shares of the Transferor Company are listed on the BSE Limited ('BSE') and the National Stock Exchange of India Limited ('NSE') . Further BSE and NSE by their letters, both dated November 16, 2016 have given their no objection to file the Scheme of Arrangement. The shares of the Transferee Company are not listed on any Stock Exchange. The Learned Advocates for the Petitioner Companies say that the Scheme of Arrangement provides for the transfer of the Divestment Business (as defined in the Scheme) of the Transferor Company to, and vesting thereof in, the Transferee Company, as a "going concern" on a slump sale basis (as defined under Section 2(42C) of the Income-tax Act, 1961) , for a lump sum Final Purchase Consideration (as defined in the Scheme) payable by the Transferee Company to the Transferor Company, in accordance with the terms of the Scheme. The Learned Advocates for the Petitioner Companies say that the background, circumstances, rationale and significant benefits of the Scheme are: (A) The Transferor Company and the Transferee Company have entered into an agreement dated August 10, 2016 ("Implementation Agreement") , pursuant to which it has been agreed to transfer the Divestment Business of the Transferor Company as a going concern on a slump sale basis to the Transferee Company, in exchange for which, the lump sum Final Purchase Consideration shall be paid by the Transferee Company to the Transferor Company, on the agreed terms and conditions as set out in the Scheme and in the Implementation Agreement; (B) The transfer of the Divestment Business pursuant to this Scheme would, inter alia, result in the following benefits: (a) In case of the Transferor Company; (i) Unlocking value for the Transferor Company by sale of part of its assets; (ii) Strengthening the balance sheet of the Transferor Company; and (iii) Pursuing growth opportunities in line with its strategic directions; (b) In case of the Transferee Company; (i) Creation of value for shareholders by acquiring ready-to-use assets, including business undertakings and reducing time to markets; and (ii) Allowing the expansion of the range of the products offered by the Transferee Company and its Affiliates in India. The Board of Directors of the Transferor Company and the Transferee Company have approved the said Scheme by passing their respective board resolutions, which are annexed to the Petitions.