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Zuari alone bids for Paradeep Phosphates

Bhupesh Bhandari

The K K Birla-promoted Zuari-Chambal group has emerged as the sole bidder for the government's 74 per cent stake in Paradeep Phosphates Ltd as the other companies which had showed an interest earlier - Tata Chemicals, the Abhey Oswal-promoted Oswal Chemicals & Fertilizers Ltd and Rashtriya Chemicals & Fertilizers - have not submitted bids. The last date for submitting bids was February 8.

Sources said Tata Chemicals did not submit a bid because it was unable to arrive at a reasonable value for the government's stake in Paradeep Phosphates. However, the sources added, Tata Chemicals was still interested in acquiring the government's 51 per cent stake in National Fertlizers Ltd. "We are in the process of arriving at a value for the government's stake," the sources added.

Speaking to Business Standard, RCF CMD T K Verma said: "The books of accounts and the profit & loss account of Paradeep Phosphates are only up to March 31 2001. The losses as of now are likely to be even higher. Even though the government has said it will take over the past liabilities, there is no clarity. There are many loose ends. We are unable to put a value to these loose ends."

OCFL had earlier expressed its lack of interest in Paradeep Phosphates owing to the huge liabilities, including trade credit on the company's books. It is worth noting that the Paradeep Phosphates plant in Orissa is very close to the OCFL plant also at Paradeep.

The Zuari-Chambal group has put its bid in association with OCP of Morocco. The Zuari-Chambal group flagship, Chambal Fertilizers & Chemicals Ltd, has a 50:50 joint venture with OCP in Morocco called Maroc Phosphate. This joint venture company has invested $228 million in setting up a phosphoric acid plant in Morocco.

According to sources, OCP has huge reserves of rock phosphate, which is used to make phosphoric acid, a raw material for DAP. By buying into Paradeep Phosphates, OCP can secure a market for its rock phosphate.

At the same time, the Zuari-Chambal group will get a better grip on the DAP market in the country. At the moment, both Chambal and Zuari import DAP, though Zuari produces some DAP at its plant in Goa. The group intends to leverage its marketing network to sell the Paradeep Phosphates produce.

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