Do not shortchange us: ACC's minority shareholders to Holcim

Urge independent directors to safeguard their interests amid Lafarge-Holcim global merger

Minority investors are worried that ACC and its sister-concern Ambuja Cements, will cease to exist once the merger of the world's two largest cement companies, Holcim and Lafarge, goes through.

They told ACC's board of directors at the company’s annual general meeting on Wednesday that they had enough rights to block resolutions that went against their interests. They urged the independent directors on ACC's board and the director nominated by the Life Insurance Corporation (LIC) to look after their concerns.

A complicated deal involving Holcim, Ambuja and ACC last May had raised questions about the Swiss parent’s handling of its two Indian group firms. Later, ACC was made a subsidiary of Ambuja Cements for a considerable payment to Holcim.

N S Sekhsaria, chairman of ACC, told shareholders not to worry. "Please set aside your apprehensions. The merger of Lafarge and Holcim will be beneficial for the industry and ACC. Minority shareholders will always be given a fair chance and their interests will be taken care of," he said. "The ACC brand will remain as such,” he assured them.

Aidan Lynam, the Holcim representative on ACC's board, told Business Standard, "Both companies (ACC and Ambuja Cements) are safe. They will continue to operate under their strong brands. The merger of Holcim and Lafarge will take about 18 months to complete. India will be the single largest market for the merged entity."

Asked whether there would be three companies operating in India under the merged entity, Lynam was doubtful about Lafarge. Lafarge has a relatively small capacity of eight million tonnes against Holcim’s 57 million tonnes in India.

Kuldip Kaura, CEO & MD of ACC, said, "Last year was tough as cement demand did not grow. Capacity utilisation fell to 69 per cent from 74 per cent, putting pressure on realisations.”

"Holcim has brought a lot of positive changes (to ACC). We are far ahead of our peers in using alternative fuels and raw materials," Sekhsaria said. According to him, Holcim’s  technical know-how fees were one per cent compared with the two-five per cent charged by other foreign parents from their Indian subsidiaries.

On Wednesday, the ACC stock closed at Rs 1,372.05, down 0.57 per cent on a day when benchmark indices reached record highs.