Ambuja Cements, controlled by the Adani Group, announced on Tuesday that it has merged with its subsidiaries, Sanghi Industries Limited (SIL) and Penna Cement Industries Limited (PCIL). The business also stated in a regulatory filing that it has engaged in a plan of arrangement with the two companies indicated above and that the proposed schemes, among other things, call for the merger of SIL and PCIL with Ambuja Cements.
“This merger aims to make our company more competitive and efficient, ultimately enhancing shareholder value,” stated Ajay Kapur, CEO of the Adani Group’s Cement Business. Improved internal money and working capital management will help our business operations expand. Unified cash flow management will streamline compliance needs by pooling resources for quicker growth and cost reductions in administration and governance. This development via a bigger organisation will boost market competitiveness and provide our stockholders with more value. Sanghi Industries can produce 6.6 MTPA of clinker and 6.1 MTPA of cement and has over 1 billion tonnes of limestone reserves.
According to the cement firm, its Sanghipuram facility, which has a captive jetty and captive power plant, is the biggest cement and clinker unit by capacity in India. In contrast, Penna Cement Industries has four integrated facilities in Telangana and Andhra Pradesh and a grinding facility in Maharashtra. Its operational capacity is ten MTPA. Furthermore, two facilities with a combined capacity of two MTPA are being built in Jodhpur and Krishnapatnam, with completion anticipated in the upcoming eight to twelve months. Additionally, Kolkata, Gopalpur, Karaikal, Kochi, and Colombo (Sri Lanka) are home to five bulk cement ports.
The exchange filing states that, in accordance with the valuers’ recommendations and the Board’s approval, Ambuja Cements will issue 12 equity shares of face value Rs 2 each for every 100 equity shares of SIL of face value Rs 10 each. As a result, the eligible shareholders of SIL will become shareholders of Ambuja Cements. It stated that these transactions, which are expected to be completed in nine to twelve months, will be carried out after the necessary permissions from relevant authorities and stakeholders are received.
In December last year, Ambuja Cements announced that it had successfully acquired Sanghi Industries Limited for Rs 5,185 crore. The transaction, which was fully financed by internal accruals, gave Ambuja Cement a 54.51 per cent controlling interest in SIL. Ambuja Cement agreed to pay Rs 10,422 crore to purchase Penna Cement Industries (PCIL) later in June of this year. The goal of the transaction was to increase Adani Cement’s (ACC and Ambuja Cement’s parent company) production capacity by 14 MTPA, bringing it to 89 MTPA.
