Hitesh,
A couple of questions for you on this new pick.

    1. How much money did Heidelberg spend in all for the 68 % stake at Rs 58 ?
    2. Is the Rs 360 Crores to clear the debts in addition to the money spent for the 68 % stake ? If yes, How did the infuse this money into the company ? ( Loan or Equity )
   3.  Is the 2.3 m capacity post merger ? How much was the capacity addition after merger of Indo Rama Cement?

Thanks


Edited by Mohan - 24/Aug/2009 at 8:59pm

Heidelberg Cements is among the top three cement producers in the world. The company is heidelberg and not any other name. Heidelberg is a subsidiary of Cementrum B V Netherlands.

In 2006, Heidelberg took over the co. from Birlas, infused a sum of Rs 360 crore by making a preferential allotment of 6.5 crore shares to itself at a price of Rs 54 per share and cleared the debts, making the co. debt free

Here is the history of the company from the company website mycemco.com Annual report for 2008 is available on company website.


HeidelbergCement India Limited (MCL), a HeidelbergCement Group Company, was promoted in 1958 by a Karnataka based industrialist in technical and financial collaboration with Kaisers of USA as a Public Limited Company.

The first one lac ton per annum dry process cement plant with an investment of Rs.220 lacs at Ammasandra Dist. Tumkur, Karnataka was commissioned in 1962. Immediately thereafter, an expansion was planned which doubled MCL's capacity to 2 lac tpa in 1966 at an investment of Rs.170 lacs Kaisers subsequently took control of the Company. Late Shri.G.D. Birla became the Chairman of the Company in 1966 and under his stewardship, the Company again doubled its capacity from 2 lac tpa to 4 lac tpa in 1968 at an investment of Rs.390 lacs MCL made steady progress and increased the capacity at Ammasandra to 6 Lac tpa with an investment of another Rs.230 lacs in 1978.

MCL, to expand, looked for a location in the North which, was then facing acute cement shortage. Damoh in Madhya Pradesh was selected and a 5 lac tpa green-field cement plant was set up at an investment of Rs.2950 lacs, which commenced production in 1983. This was a state of art first 5 stage preheater based technology plant in the Country which helped in maximising thermal efficiency. Encouraged with its success MCL also modernised its Ammasandra unit at an investment of Rs.3600 lacs, which was successfully completed in January, 1989, and helped not only in increasing the efficiency but also reduced cost of production on account of savings in power and fuel consumption.

The Clinkerisation capacity at Damoh was further increased to 10 lac tpa by installing another state of art 6 stage preheater Kiln at an investment of Rs.8000 lacs, which was commissioned in 1989, which helped not only in improving the operational efficiency but also in reducing the coal consumption and enhanced productivity.

A green field 5 lac tpa grinding unit was set up at Jhansi in Uttar Pradesh at an investment of Rs.5900 lacs, which commenced production in July 1989 to take advantage of the available fly ash from the nearby located Paricha Thermal Power Plant. Jhansi was considered an ideal location in view of the fact that Uttar Pradesh is one of the biggest cement consuming state with very little production capacity and even the available capacity then was only from the State Govt. owned cement plants.

With this MCL achieved a total capacity of over 20 lac in 1989-90, with a presence both in Southern and Northern markets, which at that time only ACC enjoyed. Subsequently with upgradation and balancing at Damoh, the capacity increased to 23 lac tpa in 2004-05.

Pursuant to the Share Subscription and Share Purchase Agreement and Escrow Agreement Cementrum I B.V.(subsidiary of HeidelbergCement AG) acquired Equity Shares from the S.K. Birla Group and its affiliates. In addition, further Equity Shares were acquired under the Open Offer giving Cementrum I B.V. 54.89% shareholding in HeidelbergCement India Limited.

There is an article on this company in bajaj's monthly investment magazine for this month.. The reasons for buy has been given similar "as a corporate turnaround" story and in list of cement stocks, the cheapest and prmosing stocvk available..

Re-rating etc may not happen in a hurry because the parent company may have different priorities. Heidelberg may look to restructure its global operations and India could be low in their list because of the small nature of operations here.

If one is looking at Heidelberg (India) as a stand-alone entity, that is a different matter.