The Board of Directors of Century Textiles and Industries Limited (Century) had approved a Scheme of Arrangement between the Century, UltraTech Cement Limited (UltraTech), and their shareholders and creditors for the demerger of its cement division into UltraTech.
Ultratech, a part of Aditya Birla Group, is the largest manufacturer of grey cement, Ready Mix Concrete (RMC) and white cement in India. It is also one of the leading cement producers globally. UltraTech Cement has 19 integrated plants, one clinker plant, 25 grinding units and seven bulk terminals. Its operations span across India, UAE, Bahrain, Bangladesh and Sri Lanka. UltraTech Cement is also India’s largest exporter of cement reaching out to meet the demand in countries around the Indian Ocean and the Middle East.
Century incorporated in 1897 as a Public Limited Company the company operated only one cotton textile mill at Mumbai till 1951. Thereafter, it has expanded and diversified its activities. Currently, Century has four division i.e. cement, textiles, pulp and paper and real estate.
Ultratech Cement has been largest cement manufacturer and has been acquiring cement units like Gujarat units of Jaypee Cement, units of Jaiprakash Associates and JP cement in the past to maintain its leader position.
This transaction is of Century demerging its cement business undertaking to UltraTech Cement.
The consideration for the demerger will be by way of issuance of the equity shares to the shareholders of Century as on the record date by the issuance of one equity share of UltraTech each for eight equity shares held in Century.
The transaction will result in marginal increase in promoter’s stake in UltraTech. However, post-transaction, effectively promoters stake in “Cement Business” of Century will increase from 50% to 61%.
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