GP Goenka woos investors for Andhra Cements

Amid abundant speculation that Andhra Cements Ltd has been put on the block, the G P Goenka controlled company is negotiating with at least two strategic investors to raise Rs 70-75 crore to revive fortunes of the ailing cement company.

The cement industry has been rife with the buzz that Andhra Cements principal promoter, GP Goenka, who holds 71.6 per cent stake in the company is planning to offload his entire holding to an Indian cement major.

However, talking to DNA Money, GP Goenka said, “I categorically deny that I will sell controlling interest in Andhra Cements. But I am looking to raise funds to revive Andhra Cements.”

Talks are on with two funds who are interested for a strategic stake in the cement company. At the upper end, 14% is the limit that I may offload to raise around Rs 70-75 crore that the company needs. A final agreement may be reached within the next one week, Goenka said.

The company has an accumulated loss of Rs 274 crore. Despite denials of the promoter and no independent confirmation available, cement industry sources maintained that at least one Indian cement major with limited production base in the southern market is eyeing Andhra Cements to bolster capacities in this market.

Whispers in the industry is that Zuari Cements, a 50:50 joint venture of Zuari Industries of K K Birla group and Italcementi, which has acquired Shri Vishnu Cement’s 1Mt plant in Andhra Pradesh, from India Cement, is interested in adding Andhra Cement capacity to its southern India production base.

However, none from the Birla group was available for comment. Industry sources said that any possible takeover of Andhra Cement by a major would be very much in line with the consolidation taking place in the Indian cement industry.