An agreement has been initiated between the Kolkata-based conglomerate Emani Group and Nuvoco Vistas Corp which is a part of Nirma group. This binding agreement will be the 100 percent divesting equity stake in Emami Cement. As per the sources, the move was made as Emami needed to pay a debt of somewhere around Rs 2000-2200 crore and loans against shares that amounts to about Rs 1000 crore. If we talk about Emami Group, they have three grinding units that have a cement grinding capacity of about 8.3 million tonnes per annum and also have an integrated cement plant.
“It is an all-cash deal. The firm’s equity value is roughly Rs 2,500 crore. It has a bank loan of around Rs 2,000 crore, while around Rs 1,000 crore is loan against shares,” Aditya Agarwal, Director Emami Group told FE. “We strongly believe that Nuvoco and the Nirma group will continue from here and strengthen the business further,” he added. Last year, in order to raise fund for debt, the promoters of Emami Group had also undertaken a stake sale of 10 percent through their flagship FMCG entity – Emami Ltd. This raised some where about Rs 1,230 crore. Furthermore, customary approval from Competition Commission of India (CCI) has been subjected and will be consummated in the coming three to four months.
“This acquisition is a momentous and transformational step in Nuvoco’s journey to becoming a major building materials company in India delivering superior performance. Emami Cement will enable us to take our Cement business to the next level and continue to serve our customers with innovative and high-quality products that they trust,” said Hiren Patel, chairman, Nuvoco.
Nirma Group has said that they would be the leading cement players in the country, and more importantly across East region after the merger of the Nirmax business in Rajasthan and acquisition completion.