Gouri Prasad Goenka is in advanced stage of discussions for a private placement of close to 15 per cent stake in Andhra Cements. Goenka confirmed that talks were on but said nothing was finalised yet.
Andhra Cements has plants in Vijayawada and Vishakapatnam and markets its products under the trade name ’Durga’. During 1989-90, there was a sharp decline in clinker and cement production owing to erratic and inadequate supply of coal, paucity of working capital, continuous power cut. In the same year, the company came under the provisions of the Sick Industrial Companies Act, 1985.
The group has embarked on an evaluation exercise for all its group companies and Andhra Cements was included in the list.
The strategy was to examine and identify companies from which the group would exit. As a first step, Goenka decided to invest Rs 250-300 crore in companies across the group to make them internationally competitive and economically viable. Various combinations and options were being weighed to generate funds.