The stock of India Cements tanked over 9% in the early hours of trading after it was reported that the company was divesting its stake in its Spring way Mining.
Springway Mining owns limestone-bearing lands in Panna, Madhya Pradesh, and also has plans to set up a 3-million-tonne integrated cement factory in the Damoh district in the state.
India Cements was reportedly in talks with Ultratech and Adani Group for the sale of the project. The company has finally sold its entire stake in Spring way Mining Private Ltd. (SMPL) to JSW Cements for a consideration of Rs 477 crores. According to the filing by India Cements, SMPL, which has a net worth of Rs 14.22 crores and no turnover in FY22, will cease to be its wholly owned subsidiary.
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"This is to inform you that our company has entered into a Share Purchase Agreement on 10.10.2022 with JSW Cement Limited (buyer) and divested the entire shareholdings held by it in Springway Mining Private Limited (SMPL), for a total consideration of Rs 476.87 crore," India Cements informed the exchanges.
JSW Cements has currently paid Rs 374 crore of the consideration and the balance of Rs 103 crore will reportedly be paid once certain conditions of the Share Purchase Agreement are fulfilled on or before the end of 2022.
India Cements has made no comment regarding the usage of the proceeds of the deal, which is expected to end by the end of this year, but some reports suggest that the proceeds could be used to repay its debts.
The stock currently trades at around Rs 248 per share, down 9.3%. However, some brokerages suggest the decline is temporary and are asking their clients to buy.
Article by Aman Agarwal.
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