Gujarat Ambuja sells 11% in Ambuja Cement to Holcim

Gujarat Ambuja Cements has sold 11% stake in Ambuja Cement India Limited (ACIL) to Holcim for Rs. 526.5 crores. Gujarat Ambuja owns 33% in ACIL. It has exercised its put option for an 11% stake in ACIL and has sold 9.53 crore shares to Holcim. GACL made a profit of Rs. 240.7 crores by selling these shares. After this sale, Gujarat Ambuja owns 22% shares in ACIL and Holcim the remaining 78%. Holderind Investments, a subsidiary of Holcim, currently holds 16.51% stake in Gujarat Ambuja, while ACIL holds 9.93% stake in the company.

Read the Business Standard article.

Holcim to buy additional stake in ACC and Gujarat Ambuja

Swiss cement company Holcim is planning to increase its control in ACC and Gujarat Ambuja Cements for around Rs. 2700 crores. Holcim is in talks to buy Gujarat Ambuja Cements’ 33% stake in Ambuja Cement India Limited (ACIL). ACIL, in turn, holds 35% in ACC and 9.93% in Gujarat Ambuja Cements. At present, Holcim owns 67% in ACIL. The acquisition will make ACIL a wholly-owned Holcim subsidiary.

The proposed move by Gujarat Ambuja is in line with its two-year-old agreement with Holcim under which it had reserved the put (or sell) option and Holcim had the call (buy) option for one-third of ACIL. In 2005, Holcim had bought a 67% stake in ACIL, 40% from the government of Singapore and American International Group and 27% through subscription of preferential shares, for $800 mn (Rs. 3502 crores).

Read the Business Standard article.

ACC exits Everest Industries; sells 8.2% stake in open market

ACC has sold off its residual 8.2% equity stake in Everest Industries in the secondary market, thus finally exiting from its majority equity holding in the company. The stake was put up for sale by Holcim following its acquisition of ACC in India two years ago. ACC had earlier tried to sell its 76% stake in the company to the Adani Group, who had also announced an open offer to acquire further stake as required by the takeover code. However, the offer failed to materialize due to Everest’s valuation-related issues. Finally, about a year back ACC sold off 50% stake to Eternit Finvest managed by the Mrinalini Trust of Gujarat Ambuja’s Narottam Sekhsaria. The stake sale would have fetched about Rs. 10-15 crores to ACC based on the market price.

Everest Industries is a building materials manufacturer and the oldest player in the roofing industry. The company is in the asbestos-based roofing materials business and has a turnover of about Rs. 250 crores. It sells its roofing products under the popular Everest brand while its interior products are sold under the brand E-Board.

Article in The Economic Times.

JK Cement may buy a 2 mt-plant

JK Cement Limited may acquire a 2 mt-plant in the coming year and may even consider diluting a substantial portion of equity for funding the acquisition. JK Cement has an annual capacity of 4 mt for grey cement and 0.4 mt for white cement. It is amongst the top four cement players in northern region along with ACC, Grasim and Gujarat Ambuja, and also the second largest player in white cement market after Grasim. Being a prominent player in the North, J K Cement’s primary markets are Haryana (18.2% market share), Delhi (13.4%), Rajasthan (11%) and Punjab (4%). Promoters’ holding in the company is currently at 62%, while financial institutions and the public hold the rest. In the next two years, assuming cement prices do not fall, internal accruals and cash in hand could give it about Rs 550 crore.

The Indian cement market is the second-largest in the world with a domestic annual consumption of 135 mt and an installed capacity of 160 mt and the overall cement demand in India is expected to grow at a rate of 9% for the next five years.

Read the complete article in Daily News and Analysis.