Promoters of Andhra Cements, Gouri Prasad Goenka has decided to offload a significant stake in the company. The process for offloading the stake has begun and sources say talks are on with players like Lafarge, Swiss-based CRH and Jaypee Group who have been looking at Andhra Pradesh for a greenfield plant. Some Middle East based cement companies are equally keen to enter India through this acquisition in which E&Y is advising Andhra Cements. Andhra Cements is currently going through an expansion programme which would mean by May 2009 its capacity will more than double from the current 1.6 MT to 3.5 MT in its three Andhra plants. So, it is quite natural the valuations will have to take that into account.
According to the sources, Andhra Cements is looking at $100/tonne valuation with a $100 million project debt and an equity value of $250 million. It is mostly due to its 500 million tonne limestone reserves. At the time of a bleak sector outlook, the polarization looks complete.
According to the sources, Andhra Cements is looking at $100/tonne valuation with a $100 million project debt and an equity value of $250 million. It is mostly due to its 500 million tonne limestone reserves. At the time of a bleak sector outlook, the polarization looks complete.
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