Sudarshan Chemical Industries Limited has announced the sale of its step-down subsidiary, VP4 Frankfurt GmbH, to Celanese US Holdings LLC for EUR 76.5 million. This divestment aligns with Sudarshan’s strategy to sharpen its focus on its core pigments business. The proceeds will be utilized for the prepayment of acquisition loans, significantly strengthening the company’s balance sheet and positioning it for a zero net debt/positive cash company status. The transaction is expected to close within 2-3 months.
Divestment of VP4 Frankfurt GmbH
Sudarshan Chemical Industries Limited has entered into a definitive Share Purchase and Transfer Agreement for the sale of its entire stake in VP4 Frankfurt GmbH, a step-down wholly-owned subsidiary. The buyer in this transaction is Celanese US Holdings LLC. The deal values the German subsidiary at EUR 76.5 million.
Strategic Rationale
The sale of the VP4 plant is considered non-core for Sudarshan Chemical. The company believes this divestment will strengthen its strategic focus and operational position, allowing it to sharpen its attention on its core pigments business. Currently, only approximately 5% of the VP4 facility’s production is used by Sudarshan for captive consumption. Post-closing, Nutrinova, a joint venture partner in the food additives business, will supply the required quantity of Diketene to Sudarshan. This strategic move is expected to significantly strengthen Sudarshan’s balance sheet.
Buyer and Transaction Details
The buyer, Celanese US Holdings LLC, is involved in the transaction, which also includes parties like Mitsui Chemicals and Nutrinova. Nutrinova, a joint venture between Celanese Corporation and Mitsui & Co, is known for its role in the discovery and production of the acesulfame-K sugar substitute and also sells preservatives such as sorbic acid and potassium sorbate. Celanese will acquire and operate the VP4 plant for a transitional period before ownership passes to Nutrinova.
Financial Implications
The VP4 Frankfurt GmbH facility generated revenue of EUR 15.7 million and EBITDA of EUR 4.1 million in FY26. For Q1 FY27, its revenue was EUR 4.1 million with an EBITDA of EUR 1.3 million. The proceeds from the sale are slated to be primarily utilized for the prepayment of an acquisition loan. This is anticipated to further strengthen Sudarshan Chemical’s balance sheet, potentially leading to a zero net debt/positive cash company status.
Timeline
The expected closure of the transaction is approximately 2-3 months from the announcement date.
Source: BSE
