Home / Knowledge / News / Grasim to set Greenfield VSF plant at Vilayat, Gujarat
Grasim to set Greenfield VSF plant at Vilayat, Gujarat
05
Oct '09
Mr. Gupta elaborated that the other options which were considered, include

i. a demerger into an independent company (vertical split), which might have given more direct holding to Grasim shareholders but would have resulted in loss of Grasim's strategic interest;
ii. merger of UltraTech with Grasim which would not have created a pure play cement company; and
iii. transfer of the cement business to a 100 per cent subsidiary which would not have given Grasim shareholders a direct holding.

Ernst & Young has submitted a report on share entitlement ratio, whilst DSP Merrill Lynch has provided a fairness opinion to the Board of Grasim.

Timing of restructuring and its objectives
Grasim is at an inflexion point. The strategy of using VSF's cash flows to grow cement has succeeded and cement today accounts for over 67 per cent of current Grasim's standalone EBITDA as compared to only 30 per cent in FY04. The Board, therefore, considered that the cement business be restructured in a manner that meets with all of the following objectives viz.

• protect and maximise value to shareholders
• creation of a pure play cement operation,
• opening up new financing options for its growth,
• create platform for potential eventual consolidation,
• provide direct exposure to Grasim's shareholders,
• least possible transaction costs.

Cement Sector opportunities very promising
India is the second largest cement market in the world, even though its per capita consumption is just one-eighth of China. The long term outlook is promising, even though a surplus caused by new cement capacities is likely to put pressure on margins over the immediate term.

Continuing business of Grasim
Grasim is setting up a Greenfield VSF plant at Vilayat, Gujarat for an estimated investment of Rs. 1000 crores The capacity of this plant would be about 80,000 tpa, increasing Grasim's total capacity by about 25 per cent. Commercial production is expected to commence in FY 13. Most of the requisite permissions for the plant have been received. This will reinforce Grasim's position as a world leader in VSF.

Grasim will continue to invest in VSF and other businesses, as further opportunities unfold.

Advisors to the restructuring
- DSP Merrill Lynch Limited and Enam Securities Private Limited acted as advisors.
- DSP Merrill Lynch Limited provided a fairness opinion to the Board of Grasim.
- Amarchand & Mangaldas and Suresh A. Shroff & Company acted as Legal Advisors.
- Ernst & Young Private Limited submitted a report on the share entitlement ratio.

The proposed Scheme of Arrangement will be subject to the approvals of the High Court of Judicature at Madhya Pradesh, Indore Bench and the High Court of Gujarat at Ahmedabad. The restructuring will further be subject to various statutory approvals, including those from the shareholders and the lenders / creditors.

Grasim Industries Limited

Must ReadView All

Courtesy: Delta Apparel

Apparel/Garments | On 31st Aug 2016

Delta Apparel acquires clothing brand Coast

Delta Apparel said it has bought a majority of assets in clothing...

Textiles | On 31st Aug 2016

Trützschler showing new technologies at ITMA ASIA

German textile machinery producer Trützschler will be showing new and ...

Courtesy: Textile Asia

Textiles | On 31st Aug 2016

$350mn worth of deals struck at Textile Asia fair in

The 16th International Textile Asia Exhibition in Pakistan ended with ...

Interviews View All

Pinkesh Jain
Everflow Petrofils Ltd

‘An innovative technology which India needs desperately is the...

Rajiv Sirohi
Shara

‘Portugal is taking away a major share of the mill made sector.’

Veronique Lee
Modavanti

‘Sustainable fashion is trending upwards, slowly but surely, as people...

Eric Scholler
Groz-Beckert

The Indian market has huge potential in technical textiles, and by far,...

Kai Poehler
Voith Paper GmbH & Co. KG

The glass mat industry is growing by five to eight per cent annually. Kai...

Larry L Kinn
Suominen Corporation

Larry L Kinn, Senior Vice President - Operations Americas of Suominen...

Robert Brunner
Devereux

Golfwear and menswear brand Devereux is set for greener pastures. Robert...

Wendell Rodricks
Wendell Rodricks

"We should not compare India and the West. There are things we do that...

Pranav Mishra
Huemn

Designers Pranav Mishra and Shyma Shetty’s Huemn is known for its...

Press Release

Press Release

Letter to Editor

Letter to Editor

RSS Feed

RSS Feed

Submit your press release on


editorial@fibre2fashion.com

Letter To Editor






(Max. 8000 char.)

Search Companies





SEARCH
August 2016

F2F Magazine

Subscribe today and get the latest update on Textiles, Fashion, Apparel and so on.

SUBSCRIBE


Browse Our Archives

GO


Advanced Search