IDM to take stake in Saurashtra Cement

IDM to take stake in Saurashtra Cement
Published: 13 August 2007

India Debt Management (IDM), part of the the Hong Kong-based ADM Capital (ADM), is picking up a 14% stake in Mehtas-controlled Saurashtra Cement through the conversion of debentures into equity. Saurashtra’s board will meet on August 16 to consider allotment of shares to equity warrants and convertible debentures at a conversion price of Rs 35 per share.

Saurashtra Cement will allot shares worth 74.5 lakh equity shares of Rs 10 each to IDM by converting a part of the convertible debentures at a price of Rs 35 per share. This will translate into 14% equity stake for IDM.

Mehtas, which own close to 78 per cent in the company, will see their stake coming down proportionately post conversion. IDM had invested close to Rs 93 crore in the company through the preferential allotment route. A significant part of this investment is now being converted into equity.

Saurashtra Cement has recently appointed IDM nominee Chetan Jain as a director of the company. The company is using the capital for its investment plans, which include setting up a low cost power plant in Gujarat.

The proposed power plant will generate 25 MW of electricity. The project is expected to be completed in May 2008. The company is also planning to expand its production capacity from the current 1.4 MTA to 1.7 MTA over the next two years. The company manufactures ordinary portland cement and pozzolana portland cement, besides producing sulphate resistant cement and portland slag cement. It markets cement under the brand name "Hathi Cement".