India: Ambuja wins approval for Holcim restructuring

Ambuja Cements Ltd announced on Thursday that it had received shareholders' approval to buy a 24 per cent stake in Holcim (India) Pvt. Ltd from Holderind International for INR350,000m (US$556m) as well as the amalgamation of Holcim (India).

The restructuring has been criticised by some investors and local shareholder-advisory firms for favouring the parent. Another round of voting will take place at Ambuja Cements' extraordinary general meeting (EGM) at Gir Somnath in Gujarat, as well as at a court-convened meeting on 23 November.

According to an Ambuja Cements' filing with BSE, 68.52 per cent of minority shareholders voted on 19 November in favour of Ambuja buying a 24 per cent stake in Holderind International for INR25.63 (US$0.42) a share.

The second resolution, to approve the scheme of amalgamation between Holcim (India) Pvt Ltd with Ambuja, also won shareholders' approval, with 68.53 per cent of minority shareholders voting in its favour, Ambuja Cements said.

With this vote, Holcim Ltd has cleared the first hurdle in the proposed restructuring of its Indian subsidiaries Ambuja Cements and ACC Ltd by securing a majority of the postal votes from Ambuja's minority shareholders. On 25 July, Holcim decided to restructure its India operations to make Ambuja Cements and ACC to work better together, saving around INR90,000m.

At the EGM, where the Ambuja Cements' board is proposing a special resolution for reduction in share capital because of the cancellation of Ambuja's shares held by Holcim (India) Pvt Ltd after the merger, the promoters can also vote. They will require 75 per cent of votes in their favour.

In a complex deal, Holcim planned to raise its stake in Ambuja Cements to 61.39 per cent from just over 50 per cent. Once the deal is completed, Ambuja will hold a 50.01 per cent stake in ACC.