Guj Ambuja gets nod to merge arm in Rajasthan

Gujarat Ambuja Cements has received the approval from the Board for Industrial and Financial Reconstruction to merge subsidiary Ambuja Cement Rajasthan (ACRL) with itself.

As per the merger scheme, Ambuja Cement Rajasthan's shareholders will get one share of Gujarat Ambuja Cements, for every 50 held.

Gujarat Ambuja had proposed to merge its ailing subsidiary - ACRL - as part of a rehabilitation scheme submitted to the BIFR last year.

Company officials told Business Standard that the merger would be completed and effective within the current financial year. They had however not received the exact date from BIFR for the merger to be effective.

Ambuja Cement Rajasthan (the erstwhile DLF cement) was acquired by Gujarat Ambuja in December 1999 for a consideration of Rs 131 crore and had been making losses ever since its inception.

With its net worth completely eroded due to continuous losses in the last few years, the company referred to BIFR in the year 2000.

ACRL had posted a net profit of Rs 0.21 crore in the quarter ended December 31, 2003, against a loss of Rs 1.08 crore in the corresponding period of the previous year.

The company's sales for period stood at 4.01 lakh tonne of cement and clinker as against 3.96 lakh tonne of cement in the same period, of the previous year.

The turnover in the quarter under consideration was up by 2 per cent at Rs 65.08 crore, against Rs 63.77 crore in the corresponding quarter of previous year.

The company incurred a net loss of Rs 25.45 crore for the year ended June 2003, and had accumulated losses of Rs 339.39 crore to be carried forward.