Coromandel International to Boost Stake to 93.23% in Coromandel Crop Protection Philippines

Coromandel International Limited has announced a significant strategic investment involving the acquisition of additional equity in Coromandel Crop Protection Philippines Inc. (CCPP). The company has executed an agreement to subscribe to equity shares in CCPP, infusing USD 1,93,000 into CCPP. This investment will increase Coromandel International’s stake in CCPP from the current 40% to 93.23%, making CCPP a subsidiary of Coromandel International.

CCPP, incorporated on August 3, 2007, is engaged in the marketing and wholesale trading of agricultural farm supplies and equipment. The company’s issued and paid-up equity share capital stands at 5,87,115 Philippine Pesos (Php), and its turnover for Fiscal Year 2023 was 3,101,048 Php.

The transaction is categorised as a related party transaction. However, it is conducted at arm’s length, ensuring no conflicts of interest. The promoter group of Coromandel International does not have any interest in CCPP, aligning with standard corporate governance practices.

The primary objective of this investment is to enhance Coromandel International’s market control and channel access by acquiring a significant ownership stake in CCPP. This strategic move is aimed at gaining control over key registrations, brands, and establishing a direct market presence. By increasing its stake, Coromandel International will strengthen its position in the agricultural sector, expanding its footprint and capabilities in the Philippines.

The acquisition is subject to approval from the Securities and Exchange Commission of the Philippines. The completion of this transaction is anticipated during the second quarter of FY 2024-25. The total cost of acquisition amounts to USD 1,93,000, which is approximately ₹1.56 crore. The consideration for this acquisition is entirely in cash.

With this acquisition, Coromandel International will secure an additional 53.23% equity stake in CCPP, resulting in a total holding of 93.23%. This consolidation is expected to provide Coromandel International with enhanced strategic advantages and operational synergies in the agricultural supplies and equipment market.

On July 19, 2024, the share price of Coromandel International Ltd opened at ₹1,601.05, touching the day’s high at ₹1,601.35, as of 9:56 AM on the NSE.

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. It is based on several secondary sources on the internet and is subject to changes. Please consult an expert before making related decisions.