Dalmia Bharat Cement is planning to expand beyond southern and eastern India and become a pan-India player by setting up units in the western and northern parts of the country.
The company is set to mark its entry into Maharashtra with the acquisition of Murli Cement through the corporate insolvency route, while in the Rajasthan, it is in the process of acquiring land to put up a plant there.
Ujjwal Batria, chief operating officer at Dalmia Bharat Cement, told Business Standard that the NCLT has approved its plans for the acquisition of Murli Cement with certain riders, which are being deliberated upon.
Dalmia Bharat has asked for the mining lease belonging to Murli Cement to be transferred in its name along with the incentives enjoyed by Murli Cement, if it is to acquire the west-based company.
Although the Mumbai bench of the NCLT approved Dalmia Bharat’s acquisition plan, it rejected a clause that allowed Dalmia Bharat to call off the deal at any stage, and instead has asked it to prevent Murli Cement's liquidation. Sources said Dalmia Bharat’s offer for Murli Cement stands at around Rs 400 crore while the liquidation value of Murli Cement is pegged at around Rs 230 crore.
While this acquisition will open up the Maharashtra and Gujarat market for the company, a plant in Rajasthan will help it enter the northern market as well.
The company has mining leases in Rajasthan and is in the process of purchasing land.
“We can get into this market at any point of time that we think is right,” Batria told Business Standard.
The idea of setting up a greenfield project in Rajasthan first came up last November, when Dalmia Bharat eventually failed to acquire the 6.5 million tonne per annum (mtpa) Binani Cement and mooted a plan to opt for a 4 mtpa plant in two phases.
While the cost of the plant is being worked out, had the Supreme Court allowed Dalmia Bharat control of Binani Cement, the former would have spent around Rs 7,000 crore to enter this highly competitive region.
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