The board of directors of Kesoram Industries Limited (“KIL”) has sanctioned a Composite Scheme of Arrangement with UltraTech Cement Limited (“UltraTech”). This groundbreaking decision paves the way for the demerger of Kesoram Industries’s cement division into UltraTech, alongside a reduction and cancellation of Kesoram Industries’s preference share capital.

Share Exchange Ratios and Value Unlocking

As per the agreement and independent valuations, shareholders will receive one UltraTech equity share for every 52 Kesoram Industries equity shares. Additionally, adjustments are made for preference shares of KIL, offering significant UltraTech shares in exchange. This move aims to unlock the value of Kesoram’s cement business for its shareholders and substantially improve its balance sheet by reducing debt and interest outflows.

Regulatory Approvals and Timeline

The transaction hinges on the approval of shareholders and creditors, stock exchanges, the National Company Law Tribunal (NCLT), the Competition Commission of India (CCI), and other regulatory bodies. It is expected to conclude within 9-12 months, subject to these approvals.

Advisors and Legal Consultants

JM Financial Limited serves as the exclusive financial advisor to Kesoram Industries. The independent joint valuers are PwC Business Consulting Services LLP and Bansi S. Mehta & Co. DAM Capital Advisors Limited has reviewed the fairness of the share exchange ratios, and Khaitan & Co, Kolkata, are legal advisors.

About Kesoram Industries’ Cement Division

Kesoram Industries’ cement division, recognized under Birla Shakti Cement, comprises plants in Basantnagar, Telangana, and Sedam, Karnataka, with a combined clinker capacity of 6.30 MTPA and an overall cement capacity of 10.75 MTPA. Additionally, a packing plant in Solapur, Maharashtra, enhances the company’s reach.

This demerger signifies a major reshaping of India’s cement industry landscape, potentially bolstering UltraTech’s position as a leading cement producer while streamlining Kesoram Industries’ business structure.

  Birla Shakti Cement, India, JM Financial Limited, Kesoram Industries Limited, UltraTech Cement