Some points from the RHI Magnesita EGM:
-
Project Milan has been initiated to complete integration with the acquired companies. By April 23, new organizational structure will be ready.
-
We now have 500,000 TPA capacity of which 150,000 TPA is unutilised capacity, which is enough for the next 3 to 5 years.
-
Currently the acquisitions have been funded through a 1-year bridge loan.
-
We do not plan to borrow Rs.5,000 crores – it is only an enabling provision.
-
We are now 72% steel and 28% industrial (i.e. non-steel which includes cement, glass etc.) after Dalmia acquisition which is a more balanced portfolio compared to earlier when we were more weighted towards steel.
-
We have saved 3 to 5 years by doing this acquisition. Dalmia has 5 plants and going the organic route would have taken a lot of time to recreate what Dalmia already has.
-
Why equity dilution – If we borrow, it also increases the parent’s leverage due to consolidation. The parent is also on an acquisition driven growth and hence they have to manage their own leverage also. If we take ECB loan from parent, there is 5-year lock in as per current rules which results in significant exchange risk.
-
We can still do some more small acquisitions even now.
-
Goodwill amount – not yet finalized. May be known by April.
-
Capex plans – Planning Rs.300 to Rs.350 crores capex for Dalmia modernization, Rs. 100 crores per year for maintenance capex thereafter
-
We are seeing very strong growth going ahead. All steel makers like Tata, Arcelor Mittal, Jindal etc. are talking about doubling their production. Steel sector is expected to grow 6 to 7 % CAGR, cement even faster in double digits like 10 to 11 %. We will grow more than the market.
-
No rights issue since the size is not all that big.
| Subscribe To Our Free Newsletter |
