Priyadarshini Cement Rules Out Takeover

Priyadarshini Cement Ltd (PCL) yesterday ruled out the possibility of a takeover by Gujarat Ambuja Cements Ltd, maintaining that the chief promoters and associates still hold 52 per cent of shares in the equity and Ambujas holding was a paltry 5.69 per cent in certain subsidiaries.

PCL executive director N Sujith Kumar Reddy said at a news conference here yesterday that the current trading volume on the companys scrips could be because of the excellent performance of the company and not any takeover move.

He announced that the company was going in for major expansion to treble its current capacity of 6 lakh tonne per annum to 18 lakh tonne at a cost of Rs 250 crore to become a major player in the industry. The company will also invest an additional Rs 65 crore on a 18 mw captive power project that will make production cost the lowest in the country, Reddy said.

 

He said PCL was a BIFR company just three years ago, but has turned round and not only wiped out the accumulated loss of Rs 35 crore, but has also posted handsome profits and paid an income tax of Rs 7 crore in 1997-98.

PCL production cost was the lowest when compared with the other cement majors in the country - ACC, Gujarat Ambuja, India Cements and Madras Cements. Its sales volume has been showing a 10 per cent increase every year and this trend will continue. The sales turnover in the six month period ending Sept last was Rs 105 crore against a total turnover of Rs 189 cr in 1996-97.

Reddy said apart from 52 per cent of the equity holding with the promoters and associates, some NRIs also held 5 per cent. There was no holding with the Andhra Pradesh Industrial Development Corporation or other financial institutions barring ICICI which held a negligible 0.05 per cent in the equity.

According to the executive director, the Share Transfer Committee had met on February 20 and noted that only 5.69 per cent of the equity was held by an outside party, i.e., certain subsidiaries of Gujarat Ambuja Cements Ltd.

He admitted that 31% of the equity was in public hands and around 5% with some mutual funds.