Board okays Samruddhi Cement merger with UltraTech
BS Reporter / Mumbai Nov 16, 2009, 12:24 IST
Ultratech Cement informed BSE today that the Board of Directors has considered the recommendation of the Committee of Directors on the proposal received from Samruddhi Cement, a wholly owned subsidiary of Grasim Industries, in relation to a potential consolidation of Samruddhi Cement and UltraTech at its meeting held on November 15, 2009.
The Board accepted the recommendation of the Committee of Directors and approved the amalgamation of Samruddhi into UltraTech. The appointed date for the merger is July 1, 2010.
The Board also approved the share exchange ratio of four equity shares of UltraTech Cement of face value Rs 10 each for every seven equity shares of Samrudhhi Cement of face value Rs 5 each. UltraTech Cement will issue 14.95 crore new shares, increasing its equity capital to Rs 274.20 crore.
Post merger UltraTech will have 20 per cent of market share.
Commenting on the merger, Kumar Mangalam Birla, chairman, Aditya Birla Group said, “The merger will achieve the group’s objective of consolidating its cement business into a single entity, thereby creating a platform that will help in pursuing aggressive growth going forward.”
The cement business of Grasim is currently under demerger to Samruddhi Cement, and the proposed merger scheme will take effect only upon completion of the demerger and the issuance of shares by Samruddhi to shareholders of Grasim pursuant to the demerger.
Upon effectiveness of the Scheme, UltraTech’s expanded equity capital will be 60.3 per cent held by Grasim and 39.7 per cent will be held directly by the other shareholders of UltraTech and Samruddhi.
Adesh Gupta, whole-time director and chief financial officer, Grasim and director, Samruddhi Cement said, “Upon effectiveness of the merger, Grasim will retain a
strategic and controlling interest in UltraTech while providing UltraTech flexibility for future fund raising.”
The merged entity will have 48.8 million TPA of Grey Cement across 22 plants, 504 MW of Captive Thermal Power Plants and 11.7 million cubic metres of ready mix concrete across 68 plants. With the merger UltraTech will add White cement and wallcare putty to its portfolio.
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