Nuvoco Vistas Corp Ltd, India’s fifth-largest cement group and a leading player in eastern India, has emerged as the successful resolution applicant of Vadraj Cement Ltd (VCL), which is currently undergoing corporate insolvency resolution process. The resolution plan submitted by Nuvoco has been approved by the Committee of Creditors (‘CoC’), and a Letter of Intent (LOI) has been issued. The transaction will be implemented by Vanya Corp Pvt Ltd, a wholly owned subsidiary of Nuvoco Vistas Corp Ltd.
Nirma Group-backed Nuvoco Vistas has offered INR18bn (US$209.65m) to acquire Gujarat-based Vadraj Cement, outbidding the Adani Group at an auction under the court-monitored corporate insolvency process, reports The Economic Times. Of the total, INR17.25bn is allocated to repaying financial creditors’ dues and the balance is set aside for operational credit, due to employees and corporate insolvency resolution process (CIRP) costs. Adani-owned Ambuja Cement had partnered with Prudent ARC’s RKG Funds to purchase Vadraj Cement. The company’s last offer at the auction was INR17.5bn, according to people familiar with the matter. Other bidders for the cement company included JSW Group, JK Cement and ArcelorMittal.
Nuvoco intends to fund the transaction without a significant rise in its consolidated debt levels. A phased investment will be spread over 15 months towards the refurbishment of assets and to drive operational improvements across the VCL plants. The estimated target date to commence production is around the 3QFY27, subject to the Honourable National Company Law Tribunal (NCLT) approvals for the resolution plan.
Nuvoco Vistas anticipates significant benefits from this deal. The existing facilities include a 3.5Mta (~10,000tpd) clinker plant in Kutch, Gujarat, and the 6Mta Hazira grinding unit in Surat, Gujarat. Additionally, VCL owns high-quality limestone reserves, ensuring a consistent and sustainable supply of raw materials for future production. The captive jetty in Kutch further enhances logistical efficiency.
With this transaction, Nuvoco’s total cement production capacity is set to increase to approximately 31Mta, distributed as 19Mta in the east, 6Mta in the north, and 6Mta in the west. The transaction, once consummated, is anticipated to foster substantial synergies with Nuvoco's existing manufacturing facilities in Nimbol and Chittorgarh, in Rajasthan, enabling enhanced operational efficiency. This will drive logistics optimisation, streamline operations, and improve competitiveness, providing the company with better market access and a strengthened supply chain across key regions.
On this momentous occasion, Jayakumar Krishnaswamy, managing director, Nuvoco Vistas Corp Ltd, commented, “This deal is a pivotal moment in Nuvoco’s journey, consolidating our position as the fifth-largest player in the Indian cement industry and further strengthening our market dominance. It complements our existing operations perfectly, expanding our geographic reach and operational capabilities. This strategic investment will enhance our portfolio, diversify our offerings and enable us to deliver greater value and superior service to our customers in a competitive and dynamic business landscape.”
Updated: 8 January 2025 - 08.50h
