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owned by the bangur family Shree Cement Non-binding talks are on to acquire 40% to 72% stake in Sanghi Cement For an enterprise value (EV) of ₹6,000 crore, according to multiple sources on the matter.
Indicative commercial terms have been shared. According to sources, the talks are not exclusive and other parties may also discuss a deal together.
An executive with knowledge of the matter told ET, “The due diligence has not started yet.”
Commercial terms may vary depending on the result of due diligence. Conversation can be inconclusive. EV of ₹6,000 crore includes debt of ₹1,800 crore. This equity value is being discussed at ₹ 4,200 crore. On this assessment, Shree Cement If a deal happens, the quantum of equity stake could be discussed between ₹1,680 crore and ₹3,024 crore, not including the cost of the open offer.
In the past, rivals such as ultratechDalmia India and JSW Cement Well-placed industry sources said there were also informal discussions for a possible acquisition, but no deal materialized.
Shree Cement declined to comment. Sanghi CementDirector of Alok Sanghi Emailed queries, phone calls and text messages have not been answered.
ultratech and Dalmia Bharat declined to comment.
,JSW Cement Sanghi Cement has no intention to bid for and is not interested in acquiring the assets. Any claim to the contrary is completely baseless and untrue, said a JSW spokesperson.
Kotak Special Situations FundWhich invested ₹550 crore in Sanghi Cement in November, is said to be guiding the deal talks.
As per the latest available stock exchange disclosures, the promoters of Sanghi Cement hold approximately 72% stake in the company. As per the disclosure, about 98% of his shareholding is encumbered.
A top cement maker said, “The money was needed in November to repay some loans. We were contacted to assess your interest in purchasing the stake. The rise in global commodity prices had impacted the cement business. Things are more comfortable now. ,
As per the latest available financial data of Sanghi Cement, the company reported a loss of ₹221 crore on revenue of ₹720 crore for the first nine months of 2022-23. It is yet to report its fourth quarter results.
Sanghi Cement has a production capacity of 6.1 million metric tonnes per annum. It caters to the western Indian markets of Gujarat, Rajasthan, Maharashtra and Madhya Pradesh. Its two terminals are strategically located near the coast, facilitating the transportation of raw materials. The company has 143 MW captive power plant.
A banker keeping a close eye on the company said, “Even when the company had to go through debt restructuring in 2016, the promoters followed a similar path.
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