The B K Birla group is close to finalising the deal to sell its 15 lakh (1.5 million) tonne cement company, Mangalam Cement Ltd. The group is at an advanced stage of negotiations with four buyers- the French construction giant Lafarge and three leading cement companies from Thailand.
Representatives of Lafarge recently inspected the company's twin plants at Kota in Rajasthan. A London-based broker acting for three companies of Bangkok visited the plants on Saturday.
A top source in Birla Buildings, headquarters of the Rs 5,500-crore (Rs 55 billion) group, confirmed the visits. He, however, declined to divulge identities of the Bangkok-based companies.
Sources close to the development said the Lafarge representatives found "the company sound in technology but weak in marketing."
Lafarge would send a second team to "negotiate" with the Birla group in mid-February. A deal was expected to be signed within this fiscal, they added. A Lafarge India source said, "We do not comment on such issues".
The B K Birla group had made an attempt to sell the company to the Mexican giant Cemex one-and-a-half years ago. It expected to get Rs 350 crore (Rs 3.5 billion) from the sale at an average price of $50-55 a tonne.
Birla Buildings sources said Mangalam Cement executives had requested the group patriarch to retain the company after it started doing very well from July.
Basant Kumar, however, wanted to hive it off the company to repay the company's outstanding loans of Rs 120 crore (Rs 1.2 billion) to the financial institutions.
He had a spat with financial institutions a year ago over the outstanding amount. IDBI, lead banker, even had threatened to take over the management control of the company. The issue was later settled.