The Hindu Business Line : Sanmar Group to sell 11.91% in India Cements to co-promoters

Since this is an inter se transfer of shares among the promoters, the deal will not attract provisions of the takeover code of the Securities and Exchange Board of India, according to company officials.

Chennai , Sept. 10

SANMAR Group, led by Mr N. Sankar, has decided to divest a substantial part of its stake in India Cements Ltd to the co-promoters led by Mr N. Srinivasan, the company's Vice-Chairman and Managing Director.

Mr Sankar, who is the Chairman of the Sanmar Group, is also Chairman of India Cements.

Stargate Investments Ltd of the Sanmar Group will sell 1.65 crore shares of Rs 10 each in India Cements, representing 11.91 per cent of the paid-up equity capital, to three investment companies belonging to Mr Srinivasan and his family.

The block deal will go through on September 16 and will be effected through the stock exchange as per the prevailing statutory guidelines, according to an announcement from India Cements. The price of acquisition will be determined on the day the deal is completed. India Cements' shares closed at Rs 115.80 on Friday. At this price, the deal works out to about Rs 190 crore.

When contacted, both Mr Sankar and Mr Srinivasan said it was purely a transaction among promoters and both the promoter groups were committed to the company.

Mr Sankar said India Cements' share prices had moved up and the Sanmar Group decided to offer a part of the stake to Mr Srinivasan. Sanmar Group needed funds for its various projects, especially a poly vinyl chloride project that it is planning to implement. He would continue to be Chairman of India Cements, he said.

Mr Srinivasan said the promoters' shareholding in India Cements would remain unchanged after the deal was completed and both groups would continue to work together. The promoters' holding in the company is 43.68 per cent.

According to the announcement, Stargate Investments will sell the shares to EWS Finance & Investments Ltd (35 lakh shares), Prince Holdings (Madras) Pvt. Ltd (one crore shares) and Anna Investments Pvt. Ltd (30 lakh shares), all of which are constituents of India Cements' promoter group. Stargate's stake in the company will come down from 25.17 per cent to 13.26 per cent, while that of Mr Srinivasan and his family will go up from 18.51 per cent to 30.42 per cent.

India Cements share price has moved up 177 per cent in the last one year, from Rs 41.85 at close on September 9, 2004, to Rs 115.80 on September 9, 2005. India Cements was established as a company in 1946 jointly by Mr S.N.N. Sankaralinga Iyer, Mr Sankar's grandfather, and Mr T.S. Narayanaswami, Mr Srinivasan's father. The group has an overall capacity of nine million tonnes.

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