New Delhi, Jun 13 (UNI) Adani group owned Ambuja Cement on Thursday announced the signing of a binding agreement for the acquisition of Penna Cement Industries Ltd (PCIL) at an enterprise value of Rs. 10,422 crore.

Ambuja will acquire 100 percent shares of PCIL from its existing promoter group, Mr. P. Pratap Reddy and family. The acquisition will be fully funded through internal accruals, the company said in a release.

“This landmark acquisition is a significant step forward in Ambuja Cement’s accelerating growth journey,” said Mr. Ajay Kapur, CEO & Whole Time Director of Ambuja Cement.

“By acquiring PCIL, Ambuja is poised to expand its market presence in south India and reinforce its position as a pan-India leader in the cement industry. PCIL’s strategic location and sufficient limestone reserves provide an opportunity to increase cement capacity through debottlenecking and additional investment,” he added.

Importantly, the bulk cement terminals (BCTs) will prove to be a gamechanger by giving access to the eastern and southern parts of peninsular India, apart from an entry to Sri Lanka, through the sea route. Our aim is to make PCIL highly competitive on cost and productivity and improve its operating performance, Kapur said.

PCIL has 14 MTPA cement capacity, of which 10 MTPA 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.

Around 90 percent of the cement capacity comes with railway sidings, and some are supported by captive power plants and waste heat recovery systems. Further, surplus clinker at the Jodhpur plant will support an additional 3 MTPA cement grinding capacity over and above 14 MTPA.

The existing dealers of PCIL will move to Adani Cement’s market network to bring in formidable synergy.

UNI SKB CS1915