Funds to buy into Saurashtra Cement

Funds to buy into Saurashtra Cement
Published: 16 January 2006

Asian Debt Management (ADM), the UK-based Toro Managers and Brescon Advisory will buy up to 23 per cent equity in the Mehta group-promoted Saurashtra Cement (SCL) for Rs 105 crore. "Through a preferential allotment of shares, the SCL management has issued fresh shares to ADM, Toro and Brescon for Rs 105 crore. Post-issue, these funds will hold 23 per cent in Saurashtra Cement," a source close to the development said.  On January 9, ET had reported that various funds including ADM are in the race to pick up equity in SCL. Sources said SCL would use these funds to prepay the debt to FIs and banks. Last year, ADM Capital had invested $90m in India Cements. 
 
SCL is the flagship of the Mehta group. Banks and FIs now hold 33.88 per cent in the company, while Rajkot Nagarik Sahakari Bank alone holds 31 per cent stake. The promoters’ holding is over 30 per cent, while the public holds around nine per cent stake in SCL. In December ’05, FIs had approved SCL’s corporate debt restructuring package, which includes partial remission of interest and other charges, cut in interest rates, repayment re-schedulement and option to the lenders for partial conversion of debt into equity of company. 
 
The company has a production capacity of 1.3Mta. Currently, SCL is in the process of enhancing the capacity to 1.5Mta. SCL manufactures ordinary portland cement and pozzolana portland cement. It also produces sulphate resistant cement and portland slag cement. SCL markets cement under the brand name "Hathi Cement".