NEW DELHI: BMM Cements (BCL) is planning to raise $33 million (around Rs 200 crore) from International Finance Corporation to fund its turnaround.
Currently part of Bharat Mines & Minerals group (BMM group), BCL shareholders in November 2014 had agreed to transfer ownership to Sagar Cements Limited (SCL). After the transfer, BCL will become a wholly owned subsidiary of SCL.
SCL has cement manufacturing capacity of 2.75 MTPA spread across two plants located at Matampally and Pedaveedu in the Nalgonda district of the state of Telangana.
BCL has a 0.95 MTPA integrated cement manufacturing unit in Anantpur district, Andhra Pradesh. The cement plant was commissioned in 2012 and currently produces Ordinary Portland Cement (OPC) grades 53 and 43 and Portland Pozzalona Cement (PPC).
Due to various internal and external constraints, the capacity utilisation of the plant has been low since inception and it has been incurring losses.
SCL’s turnaround for BCL would need an investment of $104 million, said IFC. It will be funded through equity contribution of $47.5 million, working capital loans of $6.5 million and long term debt of $ 50 million, which includes IFC investment of $33 million.
IFC said the investment will help protect existing jobs, which are in excess of 1,500, and also create approximately 500 to 700 new direct and indirect jobs.
The Reddy family holds 56.9% in SCL, while 18.6% is held by AvH Resources India Private Limited, the Indian subsidiary of Belgium based global conglomerate-Ackermans and Van Haaren. The balance is held by institutions and public.
