Sagar Cements sells JV stake to French partner
Sagar Cements will use some of the money to purchase capital equipment for its plant at Mattampally in Hyderabad
Mumbai: Hyderabad-based Sagar Cements Ltd on Wednesday said it had sold its entire stake in its joint venture Vicat Sagar Cement Pvt. Ltd, to Parficim S.A.S, France, an affiliate of Vicat S.A., for ₹ 435 crore.
Sagar would use some of the money to purchase capital equipment for its plant at Mattampally in Hyderabad, and the rest to fund organic and inorganic growth to expand with the objective of playing a larger role in the cement industry in South India, the company said in a statement.
Sagar Cements and The Vicat Group had entered formed this joint venture in June 2008, with the objective of setting up a 5.5 million tonne (mt) plant in Gulbarga, Karnataka. The first phase of this facility, capable of producing 2.75mt was completed in December 2012, with production commencing in January 2013. Sagar’s contribution for the first phase was ₹ 86 crore for its 47% stake in the JV.
The sale is subject to the approval of shareholders and regulatory authorities, the statement added.
“This transaction will enable both Vicat and Sagar to better focus on their own strengths and strategies," said Sreekanth Reddy, executive director, Sagar Cements.
With this acquisition, Vicat now owns two cement plants in India with a total capacity of 8mt. In 2010, the French cement maker bought a 51% stake in Hyderabad’s Bharathi Cement Corp. Ltd.
At 10.28am, shares of Sagar Cements were trading at ₹ 343, up 5.9% from its previous close while India’s benchmark Sensex Index was up 0.30% at 25,304.49 points.
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