Holcim to sell GACL's non-core businesses

GACL Finance, GGL Hotels to be put on the block.

Holcim, which has bought 14.8 per cent stake in Gujarat Ambuja Cements (GACL), will sell the non-core businesses of the company by May. The move is a part of the company's global strategy of concentrating on its core business.

A senior GACL official said the Swiss cement major, which proposed to buy another 20 per cent of GACL through an open offer, intended to dispose the subsidiaries engaged in non-core activities. Pricewaterhouse Coopers has been appointed to evaluate the non-core businesses.

"Assets and businesses belonging to GACL which are not core to Holcim, including investments in subsidiaries, are proposed to be sold off," he added. GACL intended to pull out of its non-core business before the closure of the open offer, he said.

Priced at Rs 90.64 a share, the open offer would open on March 25 and close on April 13.

GACL's non-core subsidiariaries are GACL Finance and GGL Hotel and Resort Company, while non-core joint ventures are Bengal Ambuja Housing Development and Bengal Ambuja Metro Development.

GACL has also got a non-core associate, ICAN Securities & Research, in which it holds a 41.12 per cent stake. GACL holds 100 per cent and 79.95 per cent in GACL Finance and GGL Hotel and Resort Company, respectively.

It holds 49.99 per cent each in two joint ventures "" Bengal Ambuja Housing Development and Bengal Ambuja Metro Development- with the West Bengal government.

Sources said Harshvardhan Neotia, who spreaheads Bengal Ambuja's businesses in West Bengal, would take control of the real estate business.

Neotia is a part of the GACL promoters, who sold out their 14.8 per cent last week to Holcim. Bengal Ambuja runs a mall, City Centre and a chain of country houses, named Shyamolima.

Last year, immediately after gaining two-third control in Ambuja Cement India, an investment arm that held a 14 per cent stake in the Associated Cement Companies (ACC), Holcim had announced that ACC would divest its non-core businesses.

Accordingly, ACC pulled out of Everest Industries, an asbestos company, and its refractory division. The GACL stock lost 2.16 per cent today to close at Rs 88.50. Analysts said the open offer price of Rs 90.64 dampened sentiment at the counter.