Acquisition of Penna Cement to increase pan-India presence, entry into Sri Lanka: Ambuja Cements
Penna Cement will increase Ambuja Cements' presence in India, particularly in South India, besides making way to markets in neighbouring Sri Lanka, the cement company said in a presentation explaining the rationale behind the acquisition.
On Thursday, Ambuja Cements announced that it has decided to acquire 100 per cent shares of Penna Cement Industries Limited. Penna Cement to now become wholly owned subsidiary of Ambuja Cements.
The transaction has an enterprise value of Rs 10,422 crore. The cement maker said that the transaction would be fully funded through internal accruals.
The transaction includes acquisition of 14.0 million tonne per annum cement capacity. Under construction 4.0 MTPA cement capacity at Jodhpur IU and Krishnapatnam GU to be completed by the seller.
«Cost to complete the same is part of Enterprise Value,» Adani Cement said.
The acquisition will help to accelerate Ambuja Cements' journey to 140 MPTA production by 2028.
With the acquisition of Penna, Adani Cement's operational capacity is now 89 MTPA. The remaining 4 MPTA under construction capacity will be operational in 12 months.
PCIL has 14 MTPA cement capacity, of which 10 MTPA (Millions of Tonnes Per Annum) is operational, and the remaining is under construction at Krishnapatnam (2 MTPA) and Jodhpur (2 MTPA) and will be completed within 6 to 12 months.
This acquisition, according to Adani Cement, will also fast-track the capacity that was otherwise was planned as a greenfield expansion. It is expected that the South India market
