Atul close to finalising investor for aromatics unit

Chemicals manufacturing company Atul is close to zeroing in on an investor for its aromatic business that would provide it access to funds for expansion.

The India-based company is looking to divest about 20% stake in its aromatic division, which manufactures para anisic aldehyde, para cresol and para anisic alcohol, chemicals that are used in manufacturing cosmetics, bulk drugs and animal nutrients, reported The Economic Times.

A person involved with the negotiations was quoted by the newspaper as saying that the aromatics divison had contributed nearly a quarter of Rs 17.75bn( $319.18m) to the company’s revenues.

"We are considering partial divestment of 10-20% and keep the control with us," the person added.

Potential buyers are valuing the division at around Rs8bn, but the management is seeking about 50% more.

Atul chairman Sunil Lalbhai said the company is open to selling stakes in less profitable businesses provided they get the right valuation, which had led to speculations on whether the aromatics business could be the first to be put on the block.

Atul, a member of Lalbhai Group, has a diversified portfolio with products including Agrochemicals, Aromatics, Bulk Chemicals & Intermediates, Dyestuffs, Pharmaceuticals & Intermediates, Polymers and Floras.

The firm’s Aromatics manufacturing facility is located at Ankleshwar in Gujarat, about 350 km north of Mumbai.