The Gouri Prasad Goenka-controlled Andhra Cements is in advanced stage of discussions for a private placement of close to 15 per cent stake. Goenka confirmed that talks were on but said nothing was finalised yet.
The stock markets seem to have got whiff of the news as more than 263,000 shares were traded on the Bombay Stock Exchange last Friday, with the scrip closing at Rs 28.6 after touching a high of Rs 29.5.
The shareholding pattern filed with the exchanges show that Indian promoters hold 71.60 per cent, foreign promoters 13.03 per cent, mutual funds and UTI 0.04 per cent, banks, financial institutions, insurance companies 0.49 per cent, private corporate bodies 5.38 per cent, NRI/OCBs 0.16 per cent and public 9.30 per cent, as on March 31, 2005.
Market sources said the deal could add around Rs 90 crore (Rs 900 million) to Goenka's coffers. The figure was close to the amount the group had committed to rake in by diluting its stake in Andhra Cements as mentioned in the corporate debt restructuring proposal of flagship, Duncans Industries.
In an earlier interview, Goenka had said the group would go in for a one-time settlement for Andhra Cements and it would be debt free in two months.
Andhra Cements has plants in Vijayawada and Vishakapatnam and markets its products under the trade name 'Durga'.
During 1989-90, there was a sharp decline in clinker and cement production owing to erratic and inadequate supply of coal, paucity of working capital, continuous power cut. In the same year, the company came under the provisions of the Sick Industrial Companies Act, 1985.
The group has embarked on an evaluation exercise for all its group companies and Andhra Cements was included in the list.
The strategy was to examine and identify companies from which the group would exit. As a first step, Goenka decided to invest Rs 250-300 crore (Rs 2.5-3 billion) in companies across the group to make them internationally competitive and economically viable. Various combinations and options were being weighed to generate funds.
