As the cement sector picks up and is showing signs of good prospects going forward, Dalmia Group is looking at a merger of its listed cement companies Dalmia Bharat and OCL India, sources with direct knowledge share. A source also shared that the Dalmia family members are in talks for the merger and the swap ratio is expected to be in favour of the OCL India's shareholders.
As part of the mega restructuring plan Dalmia Bharat will also merge its unlisted arm Dalmia Bharat Enterprises with itself. Global private equity firm KKR owns 14.5% stake in Dalmia Bharat Enterprises will eventually own a minority stake in the merged listed entity, a source said.
Dalmia Bharat and OCL India have revived plans of the merger after a failed attempt way back in 2008. Dalmia Bharat owns 48% stake in OCL India and both companies together have a cement capacity of close to 20 million tonnes, Dalmia Bharat being the larger one.
Joint force of Dalmia Group's cement companies will also inch closer to India's third largest cement producer, JP Associates, in terms of capacity. JPA has been selling its assets to reduce the group's debt pile. JP Associates's 4.8 mt unit was sold to Ultratech in 2013 and Bhilai unit of 2.2 mt to Dalmia Bharat, Bokaro unit is also on the block. On the other hand, Dalmia Group is in the expansion mode and is expected to reach 24 mt of cement capacity by 2015-end.
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