Agro Tech Foods to divest holding in Advanta Ltd

Our Corporate Bureau
16 May 2005

Hyderabad: The Rs 1054 crore Agro Tech Foods (ATFL), a big player in edible oils and foods business in India with brands like Sundrop, Crystal, Rath Vanaspati and ACT II, is selling its share in Advanta India to Advanta Finance BV, a subsidiary of Advanta Netherlands Holdings BV for Rs 28.8 crore. The Board of Agro Tech Foods (ATFL) has approved the sale.

Advanta India is engaged in research, development, production and marketing of high yielding hybrid seeds.

The approval is subject to signing of the sale and purchase agreement and ancillary agreements, and such regulatory approvals as may be required by the purchaser from the Indian authorities for the acquisition.

Earlier ATFL had invested Rs 9.5 crore in acquiring the equity stake of Advanta India in April 1998.

While ATFL believes that the seeds business in general and Advanta India has a promising future in this country, its disvestment in Advanta India is due to its business objectives and strategy. This sale will enable ATFL to capture value from this non-strategic asset and invest it in value added brands in its foods business. The realisation from the sale will also unlock cash, reduce borrowings and further strengthen ATFL's balance sheet.

Agro Tech Foods has a dominant market position in edible oils and branded foods sector in India with brands like Sundrop, Act II, Crystal, Real Gold and Rath Vanaspati as part of its portfolio. The company has a dominant market share and value leadership in the refined oil segment, primarily led by its flagship brand Sundrop.