Sudarshan Germany Horizons GmbH, a step-down wholly-owned subsidiary of Sudarshan Chemical Industries, signed the definitive share purchase and transfer agreement for the 100% stake sale in VP4 Frankfurt, which is a wholly-owned subsidiary of the former and a step-down wholly-owned subsidiary of the latter, on Monday, August 31.
The buyer is a part of Celanese Corporation, a global chemical and specialty materials company and does not belong to the promoter or promoter group of Sudarshan Chemical Industries, as per the company’s exchange filing.
The date of completion of sale is subject to fulfilment of condition precedents and customary closing conditions, Sudarshan Chemicals said in its statement.
VP4 Frankfurt is primarily engaged in the manufacture of certain intermediates, primarily as a tolling operator and only a small share of its output is meant for captive consumption of Sudarshan Germany Horizons, the exchange filing said, adding that the stake sale will further sharpen the company’s focus on its core pigment business.
The company added that VP4 Frankfurt had become part of Sudarshan via its acquisition of the Heubach Group and the divestment would strengthen the company’s strategic focus and operational position.
It said VP4 Frankfurt serves Nutrinova as its principal customer and only a small share of its output goes to Sudarshan for captive consumption. Diketene is an important intermediate for functional food ingredients, making the asset a stronger strategic fit with Celanese and Nutrinova, a producer of additives for the food industry such as sweeteners, it added.
The exchange filing said the transaction places VP4 Frankfurt more closely aligned with its principal customer. However, post the completion of the transaction, Nutrinova will continue to supply Sudarshan with the materials it requires, the exchange filing added.Upon completion of sale, VP4 Frankfurt will cease to be a step-down wholly-owned subsidiary of Sudarshan Chemical Industries.
“The sale of VP4 Frankfurt is a strategic step in sharpening our focus. Pigments and colorants are where we create the most value for our customers. VP4 is a well-run business with a strong team, and it now moves to the company it already serves. That is the right outcome for the asset, for its employees, and for Sudarshan,” Rajesh Rathi, the chairman and managing director of Sudarshan Chemical Industries said.
Shares of Sudarshan Chemical Industries were trading 4% higher at ₹1,317 apiece at 9.40 pm on Tuesday. The stock has gained 23.3% in the past month and 40% this year, so far.
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