Mumbai: Late on Monday night, LafargeHolcim said the competition watchdog Competition Commission of India (CCI) has cleared the deck for one part of its India plans, which involves selling Lafarge’s cement business in the country.

Mint reported that the deal to sell its entire cement portfolio could be valued at 10,000 crore and that the deal will now likely go through.

However, LafargeHolcim’s struggle with the regulatory red tape will not end there, as the company is still awaiting clearance from the Foreign Investment Promotion Board (FIPB) for its 2013 restructuring plan involving its units—ACC Ltd and Ambuja Cements Ltd.

The plan was submitted for FIPB approval in October 2013.

In July 2013, erstwhile Holcim SA announced a restructuring plan for its two India units, ACC and Ambuja Cements.

As on 14 January, the proposal was still on the deferred list put up by FIPB.

The proposal, explained in simple terms, would have made Ambuja Cement the holding company of all of erstwhile Holcim’s cement assets, including ACC.

The deal was structured in a manner that it would have also allowed erstwhile Holcim and now LafargeHolcim access to a cash flow of 3,500 crore from Ambuja’s books as a cash consideration for a 24% stake to be sold in Holcim India Pvt. Ltd to Ambuja.

Even as it awaits clearance, the relevance of the restructuring plan has changed in the past two years.

In 2013, several cement industry experts saw the restructuring as erstwhile Holcim’s strategy to access cash from Ambuja to improve its own financial performance.

Now, even if FIPB clears the proposal, the cash flow may not mean much to the company.

LafargeHolcim has a divestment target of 3.5 billion Swiss francs in 2016, which would include a divestment of the 11 million tonnes it holds in India through Lafarge India.

The India divestment alone is being pegged at 10,000 crore by bankers, obviously higher than the 3,500 crore cash Holcim could have accessed through the restructuring.

An approval from FIPB, however, still matters for LafargeHolcim’s presence in India and future strategies.

Both ACC and Ambuja Cements have not added fresh capacity since 2011.

Future capacity addition plans for these two companies hinge on the completion of the restructuring and the synergies thus unlocked.

According to a presentation that the company made in 2013, once complete, the restructuring was likely to unlock synergies worth 900 crore per annum.

The completion of the planned restructuring could also help both the companies tide over the difficult times that the sector faces through improved cost efficiency with a 900 crore cost saving every year.

For the calendar year 2015, Ambuja Cements Ltd’s stand-alone net profit fell 46% to 808 crore.

For the same period, ACC Ltd reported a consolidated profit of 588 crore, 49% lower on a year-on-year basis.

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