KOLKATA: Ultratech Cement, India’s largest cement manufacturer controlled by Kumar Mangalam Birla, is likely to go for a share swap deal with B K Birla group’s flagship company Kesoram Industries.
This deal, when goes through, will see Kesoram’s shareholders receiving shares of Ultratech, paving the way for Kesoram to become an associate or subsidiary of Ultratech Cement, sources familiar with the development said.
“Shareholders of Kesoram would receive Ultratech shares based on a swap ratio,” the sources added. Chaired by Manjushree Khaitan, Kesoram Industries is expected to join the Ultratech family, potentially allowing its units to operate independently.
Both companies have common shareholders, such as, Pilani Investments, which holds 14.9% in Kesoram and 1.2% in Ultratech. Padmavati Investment also holds stakes in both firms. Kumar Mangalam holds a controlling stake in Pilani Investments.
On Tuesday, Ultratech closed at Rs 8,728 on BSE, showing a 2.1% increase, while Kesoram rose by 4.9% to Rs 126. Earlier reports hinted at Ultratech Cement’s interest in acquiring Kesoram’s cement assets. Kesoram has scheduled a board meeting on Thursday to discuss options for repaying or retiring some of its debt.
Kesoram CEO P Radhakrishnan said it would try to cut debt to Rs 1,200 crore in a few years from the current Rs 1,700 crore.
In a stock exchange filing, Kesoram said its board meeting will also address possible withdrawal of the proposed demerger of its wholly-owned subsidiary Cygnet Industries, which is involved in rayon, transparent paper, and chemical businesses. Kesoram has a cement production capacity of around 10 million tonnes. Ultratech has a capacity of 137.8 MT.
This deal, when goes through, will see Kesoram’s shareholders receiving shares of Ultratech, paving the way for Kesoram to become an associate or subsidiary of Ultratech Cement, sources familiar with the development said.
“Shareholders of Kesoram would receive Ultratech shares based on a swap ratio,” the sources added. Chaired by Manjushree Khaitan, Kesoram Industries is expected to join the Ultratech family, potentially allowing its units to operate independently.
Both companies have common shareholders, such as, Pilani Investments, which holds 14.9% in Kesoram and 1.2% in Ultratech. Padmavati Investment also holds stakes in both firms. Kumar Mangalam holds a controlling stake in Pilani Investments.
On Tuesday, Ultratech closed at Rs 8,728 on BSE, showing a 2.1% increase, while Kesoram rose by 4.9% to Rs 126. Earlier reports hinted at Ultratech Cement’s interest in acquiring Kesoram’s cement assets. Kesoram has scheduled a board meeting on Thursday to discuss options for repaying or retiring some of its debt.
Kesoram CEO P Radhakrishnan said it would try to cut debt to Rs 1,200 crore in a few years from the current Rs 1,700 crore.
In a stock exchange filing, Kesoram said its board meeting will also address possible withdrawal of the proposed demerger of its wholly-owned subsidiary Cygnet Industries, which is involved in rayon, transparent paper, and chemical businesses. Kesoram has a cement production capacity of around 10 million tonnes. Ultratech has a capacity of 137.8 MT.