UltraTech Cement - June 2018

UltraTech Cement is planning to raise INR90bn (US$1311m) via the issue of redeemable, non-convertible debentures on a private placement basis, according to a report in The Economic Times. The company plans to seek shareholder approval of the plan at its annual general meeting on 18 July.

Binani Cement has also issued a letter of intent to UltraTech approving the Resolution Plan submitted by UltraTech for its acquisition of Binani. The Resolution Plan is now subject to approval by the National Company Law Tribunal (NCLT). Binani currently operates a 4.85Mta integrated cement plant and a 1.4Mta grinding works in Rajasthan. Through its subsidiaries it also has a 2Mta grinding plant in UAE, and a 3Mta clinker works and 0.5Mta grinding plant in China.

According to UltraTech, the acquisition will give the company access to large reserves of high-quality limestone as well as increasing its presence in India’s highly-competitive and fast-growing Northern and Western markets. “The anticipated synergies due to economies of scale, optimisation of costs, wider distribution network and expansion potential will enhance competitiveness and create value for shareholders, while also reducing cost components in relation to distribution, transportation and logistics,” said the company in a statement.