Birla Corporation Ltd on Thursday proposed the merger of Talavadi Cements Ltd, a subsidiary in which it holds a 98 per cent stake, with itself.
Talavadi Cements is awaiting allotment of a limestone mining lease for around 2,130 hectares in Madhya Pradesh’s Satna district.
The board has recommended a scheme of amalgamation after considering a valuation report by chartered accountancy firm Ray & Ray and a fairness opinion report by SBI Capital Markets.
The company, in a note, said: “After the merger, the merged entity will consider setting up a 3-million-tonne cement plant along with a captive power unit”.
The Madhya Pradesh Government had earlier recommended to the Union Ministry of Mines that the limestone mine lease be allotted to Talavadi Cements.
However, the recommendation was challenged in the Mines Tribunal and the Jabalpur High Court.
“All the petitions have since been dismissed but for one before the Tribunal and another before the High Court,” said the Birla Corp statement. The company was also allotted the Bikram Coal Block in Madhya Pradesh’s Shahdol district for captive use.
The mining lease and mine plan have been approved. It currently awaits forest and environment clearances.
Q1 net drops
The company reported a PAT of Rs 45.99 crore in first quarter of financial year 2013-14, ended June 30, against Rs 84.74 crore in the corresponding quarter of the previous year.
“The profit is lower mainly because of lower realisation and foreign exchange losses,” the note said.
According to Harsh V. Lodha, Chairman, the company “could have achieved better results but for the continued suspension of captive mining operations at Chanderia. Purchase of limestone and clinker at substantially higher costs at Chanderia dented margins.”
Mining operations were suspended at the unit following an order by the Rajasthan High Court over concerns about the impact of the activity on the Chittorgarh Fort.
jayanta.mallick@thehindu.co.in