KKR to invest Rs750crore in Dalmia Cement
Dalmia Cement (Bharat) Ltd (DCBL) and Kohlberg Kravis Roberts & Co LP (together with its affiliates, ‘KKR’) have announced the signing of a definitive agreement under which KKR has agreed to invest up to Rs750crore in DCBL’s wholly owned unlisted subsidiary (‘Company’).
Post restructuring, the Company will house DCBL’s 9MTPA cement manufacturing capacity as well as DCBL’s stake (2.4 MTPA) in OCL India Limited (Total 5.3MTPA capacity). (DCBL’s stake in OCL is 45.4%.) With this combined capacity of 11.4 MTPA, it becomes the largest private cement company in India. The Company will gradually add another 10MTPA to its capacity through upcoming green field projects across the country.
The investments will be for both organic / inorganic growth and de-leveraging. “When we realigned our businesses in March 2010, one of our goals was to create separate pure play entities that could thrive on their own and have flexibility to raise capital. This transaction with KKR is not just about capital but the foundation of a long term relationship.
It will enable us to enhance our capacity and market share through organic as well as inorganic routes, while benefiting from KKR’s global network and proven value creation capabilities,” said Puneet Dalmia, MD of Dalmia Cement (Bharat) Limited.
"We are excited to be working with a dynamic and entrepreneurial family with a successful execution track record in India. While the cement industry by nature is cyclical, this is a long-term investment in a great family business, its management team and in India’s economy. This is a way to invest behind and contribute to the continued development of India’s residential, commercial, and public sector infrastructure," said Sanjay Nayar, a Member of KKR and CEO of KKR India.
The transaction is subject to customary regulatory approvals.