Andhra Cements denies rumours of stake sale, India

Andhra Cements denies rumours of stake sale, India
Published: 18 March 2011

There is a buzz in the market that Lafarge and Italcementi are in the race to buy a promoter stake in Andhra Cements. The Goenka group run Andhra Cements currently holds 58% of the promoters holdings.

In an interview with CNBC-TV18, GP Goenka, Chairman of Andhra Cements spoke on the possible stake sale and the road ahead for the company, and below is a transcript of the interview.

Q: There are lots of rumours going around in the market about a stake sale that Lafarge and Italcementi might be picking up promoter stake; are there any talks which are currently underway?
A: All I can say is these rumors are unfounded. I do not know and I cannot comment on whether in future what will happen. But we certainly are not in discussions with either Italcementi or Lafarge.

Q: But the promoter stake has been suddenly coming down, two years back it stood at about 73%; currently it stands at 58%, so the promoters have been slowly diluting their stake or reducing it?
A: There has been no deliberate attempt to sell any stake. This is 2-3% here and there sometimes happens because of some market transaction.

Q: Can you just give us an update on the capacity expansion for the company and also what sort of capacity utilisation are you currently running at because in the previous quarter gone by there were some problems in terms of your capacity so you didn’t run at full capacity and it showed in your revenues?

A: Yes, currently the plant is closed. The expanded capacity will come to about 3.5Mt once it gets completed. There had been some issues on the expansion project that is two-thirds of the way through. We will need to be organising some funds which we are in the process of doing to complete the project.

Q: Can you give us an update on what sort of funds and how are you raising these funds and if you are generating any revenues at all now right now?
A: Right now no revenues are being generated but various options are being looked at for raising the resources.

Q: Would you give us an update whether it is via debt or it is via equity?
A: It will be a combination of both. We are not in a position to explain as to what exactly but it will be a combination of both.