FIs' stake in CemCo set to slide

Financial institution's (FIs) stake in Ultratech CemCo, the company that is being carved out of Larsen & Toubro, is expected to decline from the existing 29.8 per cent to 16.5 per cent, after Grasim Industries successfully completes its open offer for a 30 per cent stake in the new company.

Grasim has announced that the open offer will begin on June 7 and end on June 21, and is priced at Rs 342.60 per share.

L&T's formal scheme for demerging its cement business comes into effect from today.

The cement business comprising all the estate, assets, rights, claims, title, interest and authorities including accretions and appurtenances stand transferred to CemCo, from the appointed day, that is April 1, 2004, in terms of the scheme of arrangement, a notice to the Bombay Stock Exchange said.

D D Rathi, group executive president and chief financial officer, Grasim Industries said, "The shares of CemCo will be listed by the end of June on the stock exchanges."

Interestingly, Grasim is expecting to accept 44.5 per cent of the shares tendered in the open offer, in case all stakeholders offer their shares.

This is the highest acceptance ratio compared with other open offers announced in the past.

With Grasim and L&T not participating in the open offer, out of every 100 shares offered by other stakeholders, 44.50 shares will be accepted.

The open offer, if successful, will increase Grasim's holding in CemCo to 42.6 per cent. Grasim will then purchase an additional 8.5 per cent from L&T, for Rs 342.60 per share, to take its shareholding to 51.1 per cent in order to acquire management control.

Meanwhile, the public holding in CemCo, inclusive of the global depository receipts, is likely to come down to 20.9 per cent after the open offer. The stake held by the Indian public, along with the GDR's, stands at 37.6 per cent.

After the open offer, Grasim will sell 14.95 per cent of its stake in L&T to L&T Employees' Trust.