GP Goenka may exit Andhra Cements

Move essential to keep tea and fertiliser firm Duncan Inds afloat.

The G P Goenka group is likely to sell its stake in its cement producing firm, Andhra Cements, to keep its tea and fertiliser company Duncan Industries afloat.

Going by the corporate debt restructuring (CDR) proposal of the group's flagship Duncan Industries, mooted by banks and financial institutions, the Kolkata-based group is required to mobilise Rs 100 crore from the divestment of its stake in Andhra Cements, Rs 80 crore from the sale of tea gardens and Rs 40 crore from a group company in two years. In addition, Andhra Cements also need to repay loans of Rs 16 crore to Duncan Industries.

Analysts said at the ruling market rate of Rs 23 a share, the group would have to sell off its entire shareholding in Andhra Cements to generate Rs 100 crore. On March 31, it held 4,05,91,422 shares, representing 71.60 per cent stake in Andhra Cements.

"If it actually decides to sell off its entire shareholding, the promoters are expected to get a control premium over the ruling market rate,"they added.

Group Chairman G P Goenka said, "The group is committed to clear the dues of the financial institutions and banks, as per the CDR proposal of Duncan."