Grasim to get control of L&T cement business on July 1

The Aditya Birla group company Grasim Industries is set to gain management control of UltraTech CemCo "" Larsen & Toubro's (L&T) demerged cement business "" on July 1. This will make Grasim the country's largest cement company with a combined rated capacity of 31 million tonne per annum.

Subject to the successful completion of Grasim Industries' open offer for a 30 per cent stake, L&T will sell 8.5 per cent of its stake in UltraTech to Grasim on July 1, thereby taking Grasim's holding in the cement company to 51 per cent.

Grasim, at present, holds a 12.6 per cent stake in UltraTech and has made an open offer for 30 per cent at the rate of Rs 342.6 per share. The offer opens on June 7 and closes on June 21.

Confirming the development, sources told Business Standard, "July 1 is the target date for acquiring the management control of CemCo, as the sale of L&T's 8.5 per cent stake to Grasim will happen on this date."

Also, the transfer of Grasim's 14.95 per cent share in L&T to the L&T Employees Welfare Foundation, will happen on the same day. The L&T Employees Foundation will buyout Grasim's stake for a consideration of Rs 446.4 crore.

While L&T will lend around Rs 230 crore to its Employees trust, around Rs 200 crore will be raised through debt and Rs 16 crore will be generated by the trust.

Meanwhile, Grasim has already deposited Rs 1,259 crore in the escrow account, for the purchase of 38.5 per cent shares of UltraTech CemCo. The 5.3 per cent interest that the escrow account bears will be distributed among the shareholders of L&T, who participate in the open offer, resulting into a gain of Rs 3 per share.