 "Ambuja Cements")
Ambuja Cement, an Adani group company, is acquiring Sanghi Cement at an enterprise valuation of Rs 6,000 crore.
The Adani group will invest Rs 4,500 crore in acquiring the promoters’ stake and take over the company’s debt of around Rs 1,500 crore, a banking source said. An announcement is expected any time.
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Sanghi Cement has a capacity of 6.1 million tonnes per annum (mtpa) and will help the Adani companies — Ambuja and its subsidiary ACC — to reach 140 mtpa earlier than its targeted date of 2030. The two companies have a capacity of 70 mtpa as of now.
Sanghi Cement was facing liquidity issues and falling behind in its debt repayments. On July 6, India Ratings and Research downgraded Sanghi Industries Ltd’ (SIL’s) long-term rating to default category from “IND BB” with a negative outlook. The rating firm said the downgrade reflects SIL’s rescheduling of its interest obligations on the rated non-convertible debentures due to liquidity issues.
Industry sources said the cement sector is witnessing a consolidation with the top companies, such as UltraTech, Ambuja-ACC, Dalmia and JSW, looking for acquisition targets.
Dalmia Bharat has signed an agreement to acquire Jaypee Cement’s assets. Last year, JSW, Adani and UltraTech were in the race to buy Ambuja Cement from its former promoter, Holcim. However, Adani won the race with its $10.5-billion offer.
The acquisition of Sanghi Cement brings the Adani group back into the mergers and acquisitions race after it slowed down acquisitions following a negative report by American short seller Hindenburg Research in January this year. The report led to a sharp fall in Adani group share prices and promoters sold their shares to prepay their debt. Some of the group companies are also targeting to reduce their debt, one of the concerns raised by Hindenburg.
