Olam International, Tata Chemicals sign termination agreement in which TCL will not proceed with proposed 25.1% equity participation in greenfield ammonia-urea fertilizer manufacturing project in Republic of Gabon, Africa
March 31, 2014
– Olam International Limited ("Olam") and Tata Chemicals Limited ("TCL") have today signed a termination agreement and wish to announce that TCL will not proceed with its proposed 25.1% equity participation in the greenfield ammonia-urea fertiliser manufacturing project ("GFC") in the Republic of Gabon, Africa. On April 11, 2011, the parties had announced TCL's participation in the project in which Olam currently holds 80% stake with the Government of the Republic of Gabon ("ROG") holding the remaining 20%.
This decision was made due to a change in TCL's investment focus away from overseas fertiliser manufacturing and Olam's intention to move to a minority and non-consolidated position in the project.
Since TCL's intention to invest in the project was announced in 2011, Olam and TCL have worked together closely to complete the project's Front End Engineering Design ('FEED') phase. Olam acknowledges the significant contribution of TCL and its dedicated management team in developing the project to its current stage.
TCL will maintain its relationship with GFC going forward by providing any technical support that may be requested by Olam or GFC's other equity partners.
"As announced previously, Olam is continuing its discussions with other industry participants who have expressed their desire to partner with us in the project. This is in line with our intention to bring down our final equity stake to below 50%. Our belief in the project's strategic and financial value to the Group still remains intact," said Olam's Executive Director of Finance and Business Development, A. Shekhar.
Mr. PK Ghose, Executive Director and CFO of TCL said: "We will continue to pursue the strategy of bringing world class products and services to the Indian farmers, with continuing investments in innovation and partnerships focused on the home market."