Mangalam cement sale close

Mangalam cement sale close
Published: 10 February 2004

The B K Birla group is close to finalising the deal to sell its 1.5Mta cement company, Mangalam Cement Ltd. The group is apparently at an advanced stage of negotiations with two buyers- the French construction giant Lafarge and a leading cement company from Thailand, rumoured to be Holcim’s Siam City Cement. Representatives of Lafarge recently inspected the company¹s twin plants at Kota in Rajasthan.

A top source in Birla Buildings, headquarters confirmed the interest. He, however, declined to divulge identities of the Bangkok-based company. Sources close to the development said the Lafarge representatives found Mangalam sound in technology but weak in marketing.

Lafarge would send a second team to ³negotiate² with the Birla group in mid-February. A deal was expected to be signed within this fiscal, they added. A Lafarge India source said, ³We do not comment on such issues².

The B K Birla group had made an attempt to sell the company to the Mexican
giant Cemex one-and-a-half years ago. It expected to get Rs 350 crore from
the sale at an average price of $50-55 a tonne. Mangalam Cement executives had reportedly requested the group patriarch to retain the company after it started doing very well from July.  Basant Kumar, however, wanted to hive it off the company to repay the company¹s outstanding loans of Rs 120 crore to the financial institutions.