India Cements sells land in Andhra Pradesh to UltraTech Cement for Rs 70 crore

India Cements sells land in Andhra Pradesh to UltraTech Cement for Rs 70 crore

N Srinivasan-led The India Cements Ltd (ICL) has inked a pact with UltraTech Cement Ltd for the sale of land measuring 73.75 acre for Rs 70 crore, as it continues efforts to shore up liquidity.

The land is located in Vizianagram district of Andhra Pradesh and the deal includes land measuring 14.53 acres to be procured.

The move is part of the exercise undertaken by ICL to monetise some of its non-core assets for improving liquidity and operating performance as well as meeting some of the minimum capital expenditure, the company said.

SMPL sale

India Cements had sold its limestone mining subsidiary Springway Mining (SMPL) to Parth Jindal–led JSW Cement for Rs 476.87 crore in October last year. SMPL owns limestone-bearing land in Madhya Pradesh, where it is setting up a cement plant. Limestone is an ingredient used in making cement. ICL had acquired SMPL in October 2018 for Rs 182.92 crore and its sale four years later was a reflection of the reality faced by the largest cement producer in south India.

The company has engaged FLSmith and ThyssenKrupp Industries to conduct a detailed study on the operating parameters of some of its plants for refurbishment/modernisation to bring them in line with state-of-the-art modern plants. The company has also engaged Boston Consulting Group to study the operations at 3 of its plants in Andhra Pradesh and Telangana and suggest measures for improving efficiency in their operations.

The vintage nature of its plants has constrained the company in terms of production efficiency. The sale of non-core assets is seen as an attempt to beef up the cash position and fund the upgradation of plants.