Gujarat Ambuja Cements announced that it has received the approval from the Board for Industrial and Financial Reconstruction (BIFR) for merging Ambuja Cement Rajasthan Ltd (ACRL) with itself. Gujarat Ambuja has successfully managed to negotiate its terms with BIFR, as a pre-condition to the merger of the ailing unit with itself. | |
| According to the merger scheme, ACRL shareholders will get one fully paid-up equity share of Gujarat Ambuja for every 50 fully paid-up share they held. With this merger, the cement capacity of GACL would go upto 12 million tonnes. |
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| Ambuja Cement Rajasthan had made an application to the BIFR, for some amendments in the sanctioned scheme and that the scheme would be implemented on the receipt of the said amendments. |
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| Accordingly, BIFR has agreed to amend the merger scheme, pursuant to which, the merger of ACRL will take place. The effective date of the merger is June 1. |
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| Post merger, ACRL will continue to get sales tax benefits that it enjoyed before the merger, along with certain other implementational specifications that the company had applied for to the BIFR. |
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| The current share capital of ACRL is about Rs 261.29 crore, out of which Rs 128.16 crore (49.05 per cent) is from Gujarat Ambuja. |
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| Based on the terms of the merger, shares of ACRL held by Gujarat Ambuja, representing 49.05 per cent of ACRL's equity will be cancelled. Gujarat Ambuja will issue about 26.62 lakh equity shares to the other shareholders of ACRL. |
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| This will increase Gujarat Ambuja's equity capital from Rs 176.55 crore to Rs 179.21 crore, an increase of 1.5 per cent. |
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| The merger will benefit Gujarat Ambuja not only in terms of its marketing strategy but will also substantially reduce the sales and administrative overheads of both the companies. |
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| It has been sourcing clinker for its plant at Bhatinda from ACRL. |
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