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Sunday, 04 October 09
GRASIM TO CONSOLIDATE CEMENT BIZ


The Statesman reported that, India's largest cement producer Aditya Birla group today said it would consolidate its cement businesses by merging Grasim cement with Ultra Tech, which together will have a capacity of 49 million tons per annum or 20 per cent of the country's cement production.

The group, which had acquired Ultra Tech from engineering giant L&T in 2004, said it would hive-off Grasim cement into Samruddhi, a wholly owned subsidiary.
The demerged entity would be listed and then merged with UltraTech.

“Post consolidation of Samruddhi and UltraTech, a cement company with a capacity of 49 million tons will be created,” Grasim's whole-time director and chief financial officer, Mr Adesh Gupta told reporters here.

India produces nearly 219 million tons of cement per annum and is the second largest producer of the building material after China.

Presently, the capacity of Grasim is 26 MT and that of UltraTech is 23 million tons. “The entire consolidation would be over in the next 8-10 months,” Mr Gupta said.
The Aditya Birla Group chairman, Mr Kumar Mangalam Birla, in a statement said: “The restructuring move is designed to ensure Grasim's majority stake in, and continued support to, the rapidly-growing cement business, while simultaneously providing Grasim shareholders direct participation in the pure-play cement company.”

Post-merger (Samruddhi and UltraTech), Grasim's holding in the consolidated entity would be somewhere between 55-65 per cent, Mr Gupta said.

“Our holding in the merged entity will be between 55 and 65 per cent as we hold 55 per cent in UltraTech Cement while post-demerger our holding in Samruddhi will be 65 per cent,” he said.

Grasim shareholders would hold 35 per cent in Samruddhi.

The demerger of Grasim Cement is likely to be completed in the last quarter of this fiscal, he said.

As a part of the restructuring exercise, Samruddhi would issue one equity share of Rs 5 each to Grasim shareholders for every share they hold in Grasim.

The advisors to Grasim's restructuring process are DSP Merrill Lynch, Enam Securities, Amarchand and Mangaldas, Suresh A Shroff and Company and Ernst and Young.
PTI
Source: The Statesman



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