The Hindu : Business : Holcim buys 14.8 p.c. stake in Gujarat Ambuja

Online edition of India's National Newspaper
Tuesday, Jan 31, 2006

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Holcim buys 14.8 p.c. stake in Gujarat Ambuja

Staff Correspondent

Deal valued at Rs. 2,100 crore

MUMBAI: In a Rs. 2,100-crore deal, Swiss cement major Holcim has acquired 14.8 per cent stake in Gujarat Ambuja Cements Ltd. (GACL) from Narottam Sekhsaria and Suresh Neotia, founder families at a price of Rs. 105 per share.

The promoters continue to hold around 9 per cent of the total equity capital of the company.

The promoters have entered into a shareholders' agreement with Holderind Investments Ltd. (Holcim, an indirectly held wholly owned subsidiary of Holcim Ltd.).

As per this agreement, Holcim will make an open offer to the shareholders to buy up to 20 per cent of the equity share capital of the company at about Rs. 90 per share. Through its subsidiary, Holcim also has a significant stake in the other Indian cement major, ACC.

Post-open offer, Holcim will nominate three directors on the board of GACL. Holcim, according to a GACL release, has expressed its firm belief in the entrepreneurial and management capabilities of the company and it will work with the existing promoters and the management team to further strengthen the company's position in the Indian cement sector.

The board of directors of GACL, at its meeting held here on Monday, has elected Mr. Sekhsaria, founder promoter and Managing Director, as non-executive Vice Chairman of the company following his stepping down as Managing Director for personal reasons.

Anil Singhvi, whole-time director of the company, has been appointed as Managing Director of the company. Vinod Kumar Neotia (non-executive director), Harvardhan Neotia (non-executive director) and Pulkit Sekhsaria (whole-time director) have resigned.

GACL has reported a 34 per cent jump in its net profit for the quarter ended December 2005 at Rs. 122 crore (Rs. 90 crore) on the back of a 22 per cent improvement in its sales realisations.

Turnover up

The company reported a turnover of Rs. 797.5 crore (Rs. 734.65 crore) and sold 3.42 million tonnes (3.34 million tonnes) of cement during the period.

The operating profit was marginally higher at Rs. 199.24 crore (Rs. 198.42 crore) while interest and depreciation costs were lower at Rs. 20.14 crore (Rs. 22.6 crore) and Rs. 50.71 crore (Rs. 59.78 crore), respectively. The company provided Rs. 36.42 crore (Rs. 23.56 crore) for tax.

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