Aditya Birla group's flagship Grasim Industries will take over the management control of UltraTech CemCo -- the demerged cement business of Larsen & Toubro -- in the next couple of months.
D D Rathi, group executive president and chief financial officer, Grasim, on Wednesday said the company will announce an open offer for acquiring an additional 30 per cent of the equity of Larsen & Toubro over the next few weeks. "The open offer process will be completed in June," Rathi said. The open offer will be made at Rs 342.6 per share, he added.
The company has deposited Rs 1,279 crore (Rs 12.79 billion) in the escrow account for the open offer that it will be making for acquiring an additional 30 per cent of the equity of Larsen & Toubro. Grasim, which holds around 15 per cent stake in L&T, will also sell 14.9 per cent stake to L&T's Employees Welfare Foundation.
Grasim and the L&T Employees Foundation have entered into an informal understanding for the transfer of only 14.9 per cent stake to skirt the open offer.
Grasim on Wednesday announced a Rs 534 crore (Rs 5.34 billion) capital expenditure plan, spread over the next couple of years. "We have lined up capital expenditure of around Rs 410 crore (Rs 4.1 billion) in the current year and the rest will be invested in the next financial year," Rathi said.
While the company plans to spend Rs 41 crore (Rs 410 million) in the current year for debottlenecking its cement plants, Rs 95 crore (Rs 950 million) will be spent in modernisation of the units.
Besides, Rs 23 crore (Rs 230 million) will be invested in power generation by Grasim in the current year. The debottlenecking will raise the capacity by around 1 million tonne by fiscal year 2005-06.
Around Rs 170 crore (Rs 1.7 billion) will be invested in its viscose staple fibre division in this year, followed by an investment of Rs 46 crore (Rs 460 million) in the next financial year. The company will also incur an expenditure of Rs 35 crore (Rs 350 million) in its chemical business.