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KKR to invest in Dalmia Cement

World Cement,

Dalmia Cement (Bharat) Ltd (DCBL) has announced that Kohlberg Kravis Roberts (KKR) has agreed to purchase a 15 - 20% stake in the cement maker’s unlisted unit for Rs. 7.5 billion.

Reuters reports that KKR will get a 15% stake if Dalmia draws down only Rs. 5 billion, but the stake will rise to 20% if it draws an additional Rs. 2.5 billion. The Indian cement manufacturer said it expects regulatory approvals to arrive in 60 days, after which the company will receive Rs. 5 billion. KKR’s investment is one of the biggest private investment ever in India’s cement sector. The unlisted entity, which is a wholly owned unit of DCBL, at present, will house DCBL’s 9 million tpa manufacturing capacity, its entire 45.4% stake in OCL and the proposed 10 million t of new capacity. OCL has an installed capacity of 5.3 million t.

In March 2010, Dalmia Cement said it would spin off its cement, power and refractory business into its unit Dalmia Bharat Enterprises and list it in the stock exchange by the end of the year. The unlisted entity in which KKR will have a stake will become a wholly-owned unit of Dalmia Bharat Enterprises post-restructuring. Following the demerger, Dalmia Cement (Bharat) will be a sole sugar company and will be renamed.

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