Heidelberg pays Rs 436 cr for 51% in Mysore Cement

Heidelberg Cement of Germany is finally taking over Mysore Cement of S K Birla group at Rs 436.82 crore. The company will have 51.08 per cent stake in the cement outfit following the deal. The German major has already entered the cement space in India with the Indo-Rama group.

The board of Mysore Cement today decided to issue 6.65 crore fresh shares in favour of the German cement major as part of the deal.

Besides, the S K Birla group will sell 1.34 crore shares from its own holding to Heidelberg. The group holds close to 24.5 per cent in Mysore Cement.

However, out of its holding, around 41 lakh shares held by Birla VXL are now with the Asset Reconstruction Company of India (ARCIL), following the restructuring of that outfit. According to sources, the fresh shares will be issued at a price of Rs 54.

However, the price of shares belonging to the existing promoters will be Rs 58 per share. Both the prices were higher than the last traded price of Mysore Cement.

The stock today closed at Rs 47.65 compared with Rs 47.95 on Monday. New shares were issued at around 13 per cent premium over today's closing price. On the other hand, promoters sold a portion of their stake at around 20 per cent premium over last closing.

Mysore Cement currently had around nine crore equity shares. With the issue of additional 6.65 crore shares, the company will have 15.65 crore shares. The German cement major will have around eight crore equity shares out of 15.65 crore, or 51.08 per cent stake.

Ashish Guha was expected to take over as the managing director of Mysore Cement in place of A Bhasia. Guha is now the deputy CEO and partner of Ambit Corporate Finance. Mysore Cement has an installed capacity of two million ton per annual at present.