Asian Debt Management(ADM),the UK-based Toro Managers and Brescon Advisory will buy up to 23% equity in the Mehta group promoted Saurashtra Cement(SCL) for Rs 105 crore.A source close to the deal said " Through a preferential allotment of shares,the SCL management has issued fresh shares to ADM,Toro and Brescon for Rs 105 crore.Post -is-sue,these funds will hold 23% in Saurashtra cement," a source close to the deal said.Various funds including ADM are in the race to pick up equity capital in SCL.Sources said SCL would use these funds to prepay the debt to FIs and banks.SCL is the flagship of the Mehta Group.The promoters holding is over 30%,while the public holds around 9% in SCL.
The company has a production capacity of 1.3mtpa and is in the process of enhancing it to 1.5mtpa,SCL manufactures ordinary portland cement and pozzolana portland cement.SCL markets cement under the brand name"Hathi Cement.According to industry analysts, consolidation in the Indian cement industry is gaining momentum.The potential for growth makes the cement industry attractive.But as it takes considerable investment to build a greenfield capacity, and since there is a gestation period of 3-4 years, before a company breaks even,acquisition of smaller players in a fragmented industry is considered a viable option by foreign players. |
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| Posted : 1/16/2006 |
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