Dalmia Group is reportedly planning a merger of its two listed cement companies Dalmia Bharat and OCL India due to signs of recovery in the Indian cement sector. Core sector growth is rebounding and the demand outlook for FY15 appears to be more favourable, primarily due to the government’s new focus on infrastructure spending outlined in the most recent Budget.
Dalmia Bharat currently holds a 48% stake in OCL India; the companies have a combined cement capacity of approximately 20 million t. Following the merger, the swap ratio is set to favour OCL India’s shareholders.
According to local press reports, Dalmia’a restructuring plan will also include the company merging its unlisted unit Dalmia Bharat Enterprises with itself. Industry sources further noted that private equity firm Kohlberg Kravis Roberts (KKR) holds a 14.5% stake in Dalmia Bharat Enterprises and will therefore own a small share in the merged listed entity.
Edited from various sources by Rosalie Starling
Read the article online at: https://www.worldcement.com/asia-pacific-rim/28082014/dalmia-group-plans-merger-of-listed-cement-companies-365/