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

Textiles | On 23rd Jun 2017

Ralph Lauren ex-president Tiger of Sweden's new CEO

Hans-Christian Meyer, former president of Ralph Lauren Corporation,...

Apparel/Garments | On 23rd Jun 2017

Uware Brands into licensing agreement with Polaroid

Uware Brands has entered into a licensing agreement with Polaroid for ...

Textiles | On 23rd Jun 2017

Casper raises total funding of $240 million

Casper, the global sleep company launched three years ago has...

Interviews View All

Mandeep Nagi
Shades of India

Women value something that is unique and has a flavour of India

Kaizad Hansotia
GetNatty

Competition is the best thing that can happen to a startup

Evelyne Cholet
UCMTF

‘France had a reputation of being big in new ideas, but poor in marketing...

Kevin Nelson
TissueGen

Kevin Nelson, Chief Scientific Officer, TissueGen discusses the growing...

Suresh Patel
Sidwin Fabric

Sidwin Fabric is a manufacturer and exporter of polypropylene textiles and ...

Paolo Ocleppo
Sandvik Hyperion

Paolo Ocleppo, Rotary Cutting Segment manager, Sandvik Hyperion discusses...

Mike Hoffman
Gildan Activewear SRL

Gildan Activewear, a manufacturer and marketer of branded clothing and...

Aditi Somani
Aditi Somani

Aditi Somani specialises in luxury fusion wear with international cuts and ...

Igor Chapurin
Chapurin

"Now we can see the Russian trend in international fashion. And Russian...

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

news category


Related Categories:
June 2017

June 2017

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

SUBSCRIBE


Browse Our Archives

GO


E-News Insight
Subscribe Today and Get the
Latest News Update in Your Mail Box.
Advanced Search