KKR-backed Dalmia Cement hikes stake in OCL India to 74.6% for $165M

Dalmia Cement (Bharat) Ltd has raised its stake holding in OCL India Ltd (formerly Orissa Cement) from 48 per cent to 74.6 per cent through an inter-se share transfer within the promoter group, as per a stock market disclosure.

It acquired 4.13 per cent stake from Mridu Hari Dalmia and 22.45 per cent equity stake from Mridu Hari Dalmia Parivar Trust at a share price of Rs 675 though open market transactions on BSE on Wednesday. The deal is worth Rs 1,023 crore ($165 million).

Since the deal involves inter-se transfer, it would not trigger any open offer for OCL despite breaching the creeping acquisition limit of a listed firm.

As part of consolidation and growth of the cement sector, Dalmia Bharat Group has been strategically acquiring assets and creating new assets in Southern, Eastern and Northeastern India.

OCL India has plants in Odisha and West Bengal. With Dalmia Cement increasing its stake in OCL India, Dalmia group will have 48 per cent of its capacity in South India and the remaining 52 per cent in East and Northeast India.

“The move would help in creating better operational synergies across the group's footprint. It is a step forward in the commitment towards aligning all stakeholders' interests and overall value creations,” Dalmia Bharat said in the filing.

Earlier in March last year, Dalmia Cement had inked a pact with Jaiprakash Associates to acquire its 74 per cent stake in a cement joint venture with SAIL in Jharkhand for about Rs 667.56 crore ($109 million). It later acquired the remaining 26 per cent stake in Bokaro Jaypee Cement Ltd (BoJCL) from Steel Authority of India Ltd (SAIL) for Rs 234.56 crore ($38 million).

In the past it has bought stakes in Adhunik Cement and Calcom Cement.

Dalmia group expects to have a total capacity of 24 million tonnes in the financial year 2015-16 through both greenfield and brownfield projects.

Dalmia Cement (Bharat) is a subsidiary of the public listed Dalmia Bharat (previously Dalmia Bharat Enterprises). Dalmia Cement counts PE giant KKR as a shareholder. In 2010, KKR had invested Rs 750 crore in an unlisted arm of Dalmia Cement (Bharat) called Avnija Properties.

On Wednesday, shares of Dalmia Bharat closed the day at Rs 477.35, up 3.13 per cent from their previous close on BSE in flat Mumbai market. OCL India scrip crashed over 12 per cent to close at Rs 518.75 a share on the BSE.

(Edited by Joby Puthuparampil Johnson)

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