Birla Corp in merger mode
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- Published 26.07.13
|Lodha: Unification drive|
Calcutta, July 25: MP Birla flagship Birla Corporation Ltd has decided to merge its subsidiary Talavadi Cements Ltd with itself.
In a communication to the Bombay Stock Exchange, the firm said its board of directors today approved a scheme of amalgamation of a subsidiary, 98 per cent of which are owned by the parent, with itself.
The scheme is subject to the approval of the stakeholders and Calcutta High Court.
The move is likely to offer a breather to the firm, which is finding it difficult to meet its raw material requirement following a ban on captive mining operations at Chanderia in Rajasthan.
“The Madhya Pradesh government has recommended to the ministry of mines the allotment of mining lease of about 2,130 hectares in the Satna district to Talavadi Cements Ltd. The recommendation was challenged by various parties in the mines tribunal and the Madhya Pradesh high court. All the petitions have since been dismissed but for one before the tribunal and another before the high court,” a statement from the company said.
“After the merger, the merged entity will consider setting up a 3-million-tonne cement plant along with a captive power unit,” it added.
During the first quarter ended June, Birla Corporation has reported a decline in net profit at Rs 45.99 crore against Rs 84.74 crore in the corresponding quarter of the previous year.
Net income from operations increased to Rs 783.17 crore from Rs 668.21 crore in the same period a year ago.
Chairman Harsh Lodha said the continued suspension of captive mining operations at the facilities at Chanderia had affected the company’s performance. The purchase of limestone and clinker at substantially higher costs also dented margins.
However, higher volumes during the quarter have partially mitigated the losses arising out of lower realisations.