Tata Chemicals to not pick up equity in Gabon urea project

Tata Chemicals will not participate in an ammonia-urea project being set by a joint venture between Olam International and the Gabon government in the African country.

The Indian company in 2011 had announced its plans to participate in the urea project, in which Olam International holds an 80 per cent stake while the rest is held by the Gabon government.

The decision was made due to a change in Tata Chemicals Ltd's (TCL) investment focus away from overseas fertiliser manufacturing and Olam's intention to move to a minority and non-consolidated position in the project, the Tata group firm said in a filing to the BSE.

"Olam International and Tata Chemicals have today signed a termination agreement and wish to announce that TCL will not proceed with its proposed 25.1 per cent equity participation in the greenfield ammonia-urea fertiliser manufacturing project in the Republic of Gabon, Africa," the filing said.

TCL, however, said that it will maintain its relationship with the project by providing any technical support that may be requested by with Olam International (Olam) or 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," said Olam's Executive Director of Finance and Business Development, A Shekhar.

"This is in line with our intention to bring down our final equity stake to below 50 per cent," he added.