Hyderabad-based building materials firm Prism Cement Ltd, through its wholly owned foreign subsidiary Lifestyle Investments Pvt Ltd (LIPL), has sold its entire 24.9 per cent holding in LSE-listed Norcros Plc for £26.55 million ($42.6 million or Rs 266.3 crore), as per a stock market disclosure.
The firm said it has sold its entire holding of 145,707,247 million shares in Norcros to an undisclosed buyer at 18.5 pence a share.
LIPL’s capital gain on this transaction is pegged at £12.8 million.
Shares of Prism Cement were trading at Rs 29.60 per share, up 2.60 per cent in a strong Mumbai market on Thursday at 3.06 pm.
Vijay Aggarwal, managing director of Prism Cement, has also resigned as a director of Norcros with effect from September 20, 2013. Aggarwal has been a non-executive director of the company since October 2009.
Prism Cement is a mid-size cement producer which is also into ceramic tiles business. The company operates through three divisions—cement business, tiles maker H & R Johnson (India) and ready mix concrete unit RMC Readymix (India).
In 2010, the firm acquired Mumbai-based tile manufacturing company H & R Johnson India for an undisclosed amount.
The firm clocked revenues of Rs 4,871 crore for the year ended March 31, 2013. The cement business contributed around 38 per cent of sales, followed by the tiles & bath accessories unit which brought in around 35 per cent with the rest coming from the ready mix concrete business. While all the three units are profitable operationally, the interest cost on high debt on the books is keeping the firm in the red.
It could use some of the proceeds from the stake sale to reduce debt.
The firm’s investment in Norcros was an extension of its business. UK-based Norcros focuses on four product lines—showers, taps and bathroom accessories, tiles and adhesives. The firm manufactures ceramic tiles and adhesives and is a leading retailer of associated products such as sanitary ware under Johnson, Tile Africa and TAL brands.
In April this year, Norcros acquired UK-based Eurobath International Ltd or Vado, a private family owned maker and distributor of bathroom controls, including taps, mixer showers, bathroom accessories and valves positioned at the mid- to high-end segment of its target markets.
(Edited by Joby Puthuparampil Johnson)