Sagar cements today said its Board of Directors approved the sale of its entire 47 per cent stake in Vicat Sagar Cement Private Limited for Rs 435 crore (Rs 66.68 per equity share) to Parficim SAS, France, an affiliate of Vicat SA, France.
Vicat Sagar Cement is a joint venture between Sagar Cements and French cement maker Vicat.
Sagar Cements Executive Director Sreekanth Reddy said the transaction will enable both Vicat and Sagar to better focus on their own strengths and strategies.
"We wish Vicat the best in all its endeavours. On our part, we will continue to leverage on our strengths and explore opportunities to expand our scale and presence and create value for our stakeholders," Reddy said in a statement.
The transaction is the result of a strategic decision taken by both entities to enable each one focus on its own strengths and capabilities to create value and drive growth, it further said.
This approval is subject to further approval of shareholders of SCL and other approvals, if any, from the regulatory authorities concerned, Sagar Cements said.
Sagar Cements and The Vicat Group had entered into this joint venture in June 2008, with the objective of setting up a 5.5 million tons plant in Gulbarga, Karnataka.
The first phase of this facility, capable of producing 2.75 million tons, was completed in December 2012 with the commencement of production in January 2013.
Sagar's contribution for first phase was Rs 86 crore for its stake in the joint venture.
Sagar Cements proposes to utilise the proceeds from this stake sale partly towards purchase of some capital equipment for its Matampally plant in Telangana, while the remaining sum will be used to fund organic and inorganic growth with the objective of playing a larger role in the cement industry in South India.
Sagar Cement's current clinker capacity is 2.3 million TPA and its cement capacity is 2.75 million TPA.
