Grasim to divest its stake in Digvijay Cement to Cimpor
Grasim Industries divests its 53.63% stake in SDCC to Portuguese cement-maker Cimpor for Rs 322 crore, reports Lalatendu Mishra.india Updated: Dec 05, 2007 22:46 IST
Grasim Industries has divested its 53.63% stake in Shree Digvijay Cement Company (SDCC) to Portuguese cement-maker Cimpor for Rs 322 crore.
“The move is part of the group’s strategy of portfolio rationalisation. Total enterprise value of the transaction is Rs 674 crore and this has given a re-rating to the cement industry,” said D Muthukumaran, vice-president (strategic inititiative) Aditya Birla group.
Grasim Industries scrip moved down by 0.45 per cent to Rs 3796.15 when trading ended on BSE on Wednesday. Under the provisions of SEBI’s takeover code, Cimpor will make a public offer to acquire an additional 20 per cent stake.
Grasim had acquired SDCC for Rs 66.2 crore in 1998. SDCC, which was referred to Board of Industrial & Financial Reconstruction (BIFR), and now deregistered from the purview of Sick Industrial Companies Act, had an accumulated loss of Rs 99.3 crore as on March 2007.
Grasim was keen on exiting the investment after its acquisition of Ultra Tech Cement in 2004. The combined capacity of the Aditya Birla Group’s cement business, which is currently 31 million TPA will move up to 45 million TPA by Q2 FY09, even after the disposal of SDCC stake.
Cimpor operating in 10 countries has been looking for a foothold in India. It manufactures and markets cement, lime, concrete and aggregates, precast concrete and dry mortar.