ACC likely to net Rs 60 cr from Delhi land sale

Cement major Associated Cement Companies (ACC) has put its five acre industrial land in South Delhi's Mathura road on the block. The freehold property used to house India's first bulk cement depot.

Property consultants said the land could fetch around Rs 60 crore at the area's going rate of Rs 12 crore per acre. The final sale value could, however, be higher depending on the bids placed.

Company sources said the property had been offered for sale as it was surplus land and the company wanted to encash the idle asset. They refused to divulge details about the sale offer. As per the company's annual report for the 2003-04 fiscal, freehold land at cost stands at Rs 33.27 crore.

ACC has positioned the land as suitable for shopping malls and commercial complexes as a number of residential projects have come up in the locality. The sale is being handled by ACC's Delhi office.

Analysts believe the funds raised from the sale will be used to reduce the company's debt burden. The company has said that it plans to reduce its debt by around Rs 350 crore in the current fiscal. ACC's total debt as at March 31, 2004, stood at Rs 1,420 crore, while its average cost of borrowing had come down by 175 basis points to 5.59 per cent.

The company had chalked out a Rs 500 crore capital expenditure for the current financial year. Of this, it will invest Rs 250 crore in its Chaibasa unit in Jharkhand and the balance will be utilised for modernisation of other plants and removing bottlenecks.