Acc Pegs Rs 43 Crore Loss Provision For Ailing Subsidiaries

The Associated Cement Companies (ACC) has been forced to write down losses of around Rs 43 crore for two of its loss-making businesses during the last fiscal.

The company has been looking for a buyer for both the businesses -- the synthetic ferric oxide (SFO) business and subsidiary ACC Nihon Castings -- but has not been able to identify one yet.

A large chunk of the losses written down, at Rs 30 crore, has been for the cement major's SFO plant which was closed down in 1999-00 after operations were found to be unviable.

ACC Nihon Castings, a wholly owned subsidiary that manufactures alloy steel castings, has seen an additional contingency provision of around Rs 13 crore for the last fiscal, taking ACC's total provisioning for the subsidiary to Rs 30 crore.

The company, in its annual report, has said this was almost equivalent to the investment made in the company.

The company has taken a conscious decision to focus on its core cement business and exit from all non-core activities. As part of the plan, it has sold its 13 per cent shareholding in Floatglass India, getting Rs 19.9 crore in the process. It has booked losses of only Rs 3 crore on the deal.

The cement major is also looking to exit from ACC Rio Tinto Exploration, the 50:50 joint venture with Rio Tinto, the world's largest mining company. It has so far made only the initial Rs 7.5 crore investment and has already informed its partner that it will not make any further investment in the company.

Consequently, Rio Tinto has now emerged as the majority partner in the company.