Grasim divests Shree Digvijay Cement stake for Rs 322 cr
Grasim Industries Ltd, an Aditya Birla flagship company, has divested its entire equity holding of 53.63 per cent in Shree Digvijay Cement Company Ltd (SDCC) to Cimentos De Portugal, SGPS, South Africa (Cimpor) through its subsidiary, Cimpor Inversiones, South Africa for Rs 322 crore, which translates into a sale price of Rs 42.50 per share.
Public offer
Cimpor Inversiones will make a public offer at Rs 42.50 per share for a further 20 per cent in SDCC as per SEBI regulations. The transaction is expected to be completed by March 2008. Shares of Digvijay Cement closed 3.39 per cent lower at Rs 38.
A Portugal-based cement group, Cimpor has a total capacity of 28 million tonnes and operates from Spain, Morocco, Tunisia, Brazil, Angola, Mozambique, Egypt, Cape Verde and South Africa.
The transaction has been approved by the Grasim board and the stake will be transferred on receipt of all requisite approvals.
“We will use the proceeds from the stake sale for acquisitions and new capacity additions. The requisite funds for the ongoing expansions are already tied up,” said Mr D. Muthukumarn, Vice-President, Strategic Initiatives, Grasim Ltd.
Grasim acquired SDCC in 1998 to gain a presence in the Gujarat market. “The decision to divest SDCC equity is primarily intended to rationalise portfolio of plants,” Grasim said in a BSE announcement.
Capacity
The combined capacity of the Aditya Birla Group’s cement business, which is currently 31 mtpa will move up to 45 mtpa by second quarter of FY09, even after the disposal of SDCC stake. UltraTech along with Grasim plans greenfield plants and increasing capacities at its existing units.
On Wednesday, Grasim and Ultratech shares on BSE lost 0.45 per cent to Rs 3,796 and 1.29 per cent to Rs 986, respectively.
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