The board of UltraTech today approved a scheme of arrangement amongst Century Textiles and Industries and its respective shareholders and creditors, the Aditya Birla Group firm said in a statement. According to the scheme, shareholders of Century Textiles will get one equity share of UltraTech for every eight equity shares held, the two companies said in separate filings with the stock exchanges.
“UltraTech will issue 1.4 crore new equity shares to the shareholders of Century, which will increase its equity capital to Rs 288.58 crore, divided into 28.86 crores equity shares of Rs 10 each,” the filings added. The deal pegs the enterprise value of Century Textiles’ cement business at Rs 8,621 crore, according to BloombergQuint’s calculations and the company’s investor presentation.
Ultratech will get three integrated cement units of Century Textiles in Madhya Pradesh, Chhattisgarh and Maharashtra with a total capacity of 11.4 million tonnes per annum and a grinding unit in West Bengal of 2 mtpa. The transaction is subject to necessary approvals and is likely to be completed within 6-9 months.
- Enterprise value of the grinding unit stands at Rs 536 crore or $40 per tonne.
- Enterprise value of its cement plants stands at Rs 8,085 crore or $106 per tonne.
- The deal does not consider the upcoming 1.2 mtpa cement plant and 0.7 mtpa clinker.
The merger will increase UltraTech’s cement capacity to 109.9 million tonnes per year, the third highest outside China. It will allow UltraTech strengthen its presence in the east and central markets and extending its footprint in the western and southern markets in the country, the Birla Group company said.
In June last year, UltraTech Cement completed the Rs 16,189-crore acquisition of Jaiprakash Associates Ltd.’s six integrated cement plants and five grinding units, having a capacity of 21.2 million tonnes. Besides, the company is also into race to acquire debt-ridden Binani Cement and has put its revised offer competing with the Dalmia Bharat Group.
(Corrects an earlier version which misstated the share swap.)