Zuari group lines up Rs 300 crore for MCFL to double capacity

New Delhi: After gaining a controlling stake in the UB Group-promoted MCFL, the Zuari group plans to invest Rs 300 crore to double production capacity of phosphatic fertiliser at the Mangaluru plant.

At present, the Vijay Mallya-promoted Mangalore Chemicals and Fertilizers Ltd (MCFL) has one urea plant near Mangaluru port with an annual capacity of about four lakh tonnes of urea and a plant of about three lakh tonnes of phosphatic fertilisers.

"Zuari group has prepared the blueprint for expansion of MCFL and is looking to invest about Rs 300 crore to double the phosphoric acid capacity of MCFL," a highly-placed source said.

As per the plans, after the proposed investment, MCFL's annual capacity of phosphatic fertilisers would double to six lakh tonnes per annum from three lakh tonnes at present. The final decision will be taken in January, the source added.

In May, Zuari Group had acquired an additional 36.56 percent stake in Mangalore Chemicals and Fertilizers Ltd (MCFL) and become a majority shareholder in the firm with 53.03 percent stake.

Following that in October, Zuari group had got representation on MCFL board also and Akshay Poddar, Kapil Mehan and N Suresh Krishna were appointed as directors.

The board also had approved the appointment of N Suresh Krishnan as the Managing Director of MCFL from January 1. Krishnan is currently the MD of Zuari Global.

Zuari was competing with Deepak Fertilisers for taking control of MCFL since July 2013, but the latter withdrew from the race and has been selling shares of MCFL via open market since December 2014. Zuari group, along with the UB group, had successfully staved off a takeover bid by rival Deepak Fertilisers.

UB group currently holds nearly 22 percent stake in MCFL. As per the shareholding pattern on BSE, both Zuari group and UB group are on the list of promoters. Together, they have 75 percent stake in MCFL.