Sagar Cements will submit a resolution plan for acquisition of Andhra Cements before August 18, and expects to get the necessary clearance for the same by October.
The board of directors of the Hyderabad-based company had on July 20, approved a proposal to submit a Resolution Plan in respect of the Corporate Insolvency Resolution Process initiated by the Hyderabad Bench of National Company Law Tribunal on an application filed in respect of Andhra Cements Limited, a ‘corporate debtor’.
“ We are filing the resolution plan and cannot reveal much for now,’‘ Sreekanth Reddy. Joint Managing Director, Sagar Cements, told BusinessLine.
According to Industry sources, the deal size could be around ₹1,400 crore .
On the timeline, he said; “The resolution plan needs to be submitted before August 18, we should get all the clearances somewhere around end of September to early part of October. So, from whatever little diligence we have done, it looks like it might need about three-months for maintenance before we can start,’‘
Andhra Cement has 1.65 million tonne capacity for clinker and 1.8 million tonne for grinding at the integrated plant in Dachepalle in Guntur, and 0.8 million tonne grinding capacity in Visakhapatnam.
Sagar Cements had production capacity of 8.25 million tonnes as of end- March 2022,. It has a target to achieve 10 million tonnes capacity by FY25.
According to Reddy, the cement demand for the short term is a bit ‘challenging’, though it’s still growing at mid to low single-digit.
The policy announcements and elections could boost long-term demand.