Ultratech To Complete Century Cement Merger By September: Kumar Mangalam Birla
Ultratech Cement Ltd. chairman Kumar Mangalam Birla on Thursday said the company will complete merger of Century Cement during the second quarter of the current fiscal, taking its capacity up to 117.35 million tone.
In May 2018, the Aditya Birla group announced a reorganisation of the cement business of the group firm Century Textiles’ cement business, under a scheme of demerger. The reorganisation will bring to Ultratech ownership of 13.4 million capacity spread across Madhya Pradesh, Chhattisgarh and Maharashtra, helping the land-endowed Century focus more on its real estate business and pare debt of about Rs 3,000 crore.
“The merger of Century Cement will be completed during the second quarter of the current financial year,” Birla told the shareholders at the 19th annual general meeting here. Birla said, excluding China, Ultratech is already the third largest cement maker in the world and the merger of Century will further buttress this.
“After the completion of Century Cement transaction, coupled with the on-going capacity expansion, our capacity will be augmented to over 117.35 million tonne per annum, inclusive of its overseas operations,” he told shareholders.
The company has already got the approvals for this from the exchanges, the Competition Commission and the shareholders apart from the National Company Law Tribunal, he said, adding the transaction will be effective in the second quarter of FY20.
The only pending approval is for the transfer of mining leases, which should be in any time now, he said. “This transaction gives us an opportunity to strengthen our presence in the highly fragmented, but competitive and fast growing Eastern and Central markets. It will also extend our footprint in the Western and Southern markets,” Birla said.
Century’s cement business consists of three integrated units in Madhya Pradesh, Chhattisgarh and Maharashtra and a grinding unit in Bengal. He further said once the transfer of the mining leases gets completed, the financials will be recast to give effect to the necessary changes.
During FY19, the company had completed acquisition of Binani Cement, which was subsequently renamed Ultratech Nathdwara Cement, which has a 6.25 million tonne capacity in Rajasthan, and operates plants in China and the UAE.
As of March 2019, Ultratech had an installed consolidated capacity of 102.75 million tonne of grey cement (including 4 million tonne under commissioning), a capacity of 0.68 million tonne of white cement and two wall-care putty plants. In FY19, it reported a net income of Rs 2,456 crore as against and Rs 2,231 crore in FY18 on a revenue of Rs 35,704 crore, which rose from Rs 29,358 crore.