Century Textile and Industries approves demerger of cement business
The board of directors of Century Textiles and Industries have approved demerger of its cement business and merge it with UltraTech Cement.
The company said this development will help in unlocking value cement business for the shareholders of the company. Also, this will lead to de-leveraging of its balance sheet including reduction of debt and outflow of interest as well as creation of value for its shareholders.
Post effectiveness of the scheme, the equity shares of Ultra Tech Cement Limited shall be issued to the eligible shareholders of the company.
The revenue of cement business for FY18 was at Rs. 4,306 crore which represent 53.2 per cent of total revenue.
Demerging cement business includes 3 integrated cement units with a total capacity of 11.4 MTPA (excludes 1.2 MTPA for which statutory clearance is pending) and 1 grinding unit of 2 MTPA.
Further, this scheme is subject to approval from various authorities such as stock exchanges, SEBI, Competition Commission of India, shareholders and creditors.
It seems that investors are not happy with this development as the stock of Century Textiles tanked almost 12 per cent to touch day's low of Rs. 935 per share. However, later it recovered and at 15.05 hours the stock was trading at Rs. 994.4, down by 6.8 per cent.