Grasim completes ABCIL merger with itself

05 Jan '16

2 min read

Aditya Birla Group's Grasim Industries has completed the merger of the group company Aditya Birla Chemicals (India) (ABCIL) with itself on January 4.

Grasim will issue 14.62 lakh equity fresh shares to shareholders of Aditya Birla Chemicals, who will receive one share of Grasim for 16 shares of ABCIL they hold. The share capital of Grasim will increase from Rs 91.88 crore to Rs 93.34 crore.

In February 2015, the board of directors of both companies approved the decision to merge ABCIL with Grasim and fixed April 1, 2015, as the appointed date. ABCIL received shareholders' approval in July 2015 for merging the company with Grasim Industries. The Competition Commission of India's (CCI) approval came in September 2015.

The merger of ABCIL with Grasim industries is expected to strengthen the company's existing portfolio of viscose staple fibre, caustic soda, and allied chemicals in a standalone company.

With the merger becoming effective, Grasim's standalone earnings before interest, tax, depreciation and amortisation for the first half of fiscal increased to Rs 883 crore, from Rs 728 crore announced earlier.

Grasim is the largest chlor-alkali manufacturer and the merger will further consolidate its leadership, the company said in a statement. The installed capacity of caustic soda will move up to 804,000 tonnes per annum from 453,000 tpa.

The merger has resulted in geographical diversification of the chlor-alkali business and enables to capitalise growth opportunities backed by Grasim, it said.

As of September quarter, Grasim's consolidated net debt including 60 per cent stake it owns in Ultratech Cement was at Rs 5,893 crore and it reported net surplus of Rs 310 crore on a standalone basis. ABCIL debt was at Rs 2,123 crore as of September quarter. (SH)

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