Gujarat Ambuja shares have been rising steadily in the past one month on market speculation that Holcim, is interested in buying a stake in the company. Gujarat Ambuja shares have risen by around 10 per cent since November 2. The rise has also been fuelled by news about the visit of Markus Akermann, Holcim’s CEO to India.
Mr Akermann met Gujarat Ambuja executives including Narottam Sekhsaria, the managing director, on Tuesday. Sources told ET that Mr Akermann attended a dinner hosted in his honour by Mr Sekhsaria. Senior bankers from HSBC and some directors from Associated Cement Companies (ACC) were also believed to have been present, sources said.
Holcim has a joint venture agreement with Gujarat Ambuja unit, Ambuja Cement India (ACIL). Holcim owns around 67 per cent in this company, while Ambuja owns around 33 per cent.
Some of the speculations could also be linked to Gujarat Ambuja’s put option on its holding in ACIL, which expired in June this year. ACIL was the original vehicle for the acquisition of the Tata group’s 14 per cent stake in ACC by Gujarat Ambuja in 1999. Ambuja financed this purchase by giving 40 per cent in ACIL to private equity investors. These investors had a put
option, which expired in January ’05.
Holcim, in January this year, bought out the private equity investors for about $200m and also invested about $600m in ACIL to fund further purchases of ACC shares through an open offer.
Gujarat Ambuja, which owns 33 per cent in ACIL, has a put option on its shares, beginning anytime after June ’05. Holcim has a call option on the Ambuja holding after January ’08. (Economic Times, India)