ACC, the country’s largest cement company, is likely to emerge as the majority shareholder of Rourkela-based Shiva Cement in the next four to five months.
The Shiva Cement board on Monday approved the allotment of 22.7 million convertible warrants to ACC. Post-conversion, ACC’s shareholding will scale up to 22 per cent from the existing 11.2 per cent. Shiva Cement Managing Director R P Gupta said the conversion would take place after two to three months.
The laws of the country warrant ACC to come out with a mandatory 20 per cent open offer for the shareholders of Shiva Cement, after the conversion of the warrants.
However, Gupta declined to comment on the open offer.
If the offer is fully subscribed, ACC’s shareholding will go up to 42 per cent. The promoters, the Gupta family, hold nearly 25 per cent stake.
Sumit Banerjee, managing director of ACC, could not be contacted as he was travelling. A company’s spokesperson declined to comment.
Gupta added that the company needed funds for projects and the process was continuing.
Meanwhile, Ramit Budhraja was appointed a director of Shiva Cement. He currently is the business head of ACC eastern zone and also director of Holcim (Bangladesh).
The net sales of Shiva Cement for the year ended March 31, 2007, was Rs 27.8 crore compared with Rs 18.78 crore in the previous year. It has been making losses from 2002 to 2006. The capacity utilisation for 2006-07 stood at 51 per cent. The company entered into a marketing alliance with ACC early this year and expects to perform better.