Zuari Industries (ZIL) has received an offer by Zuari Cement (ZCL) to acquire Gulbarga Cement (GCL), a wholly owned subsidiary of ZIL, by way of subscription to equity shares of GCL, subject to the compliance and fulfillment of certain terms and conditions by the company and/or GCL, including without limitation the execution of the share subscription agreement and shareholders' agreement amongst ZCL, GCL and the company (the Agreements).
ZIL board at its meeting held on August 17, 2011 accepted the offer by the company on the terms and conditions offered by ZCL, approved the execution of the agreements by the company and also approved the taking of all steps to give effect to the proposed transaction, including without limitation, in its capacity as shareholder of GCL to procure that GCL accept the offer.
Consequent to the issue and allotment of shares by GCL to ZCL, in accordance with the terms and conditions of the share subscription agreement, ZCL's shareholding in GCL is expected to constitute 74% of the issued and paid up share capital of GCL and will cease to be a subsidiary of ZIL. However, the company shall continue to hold 26% of the issued and paid up share capital of GCL in accordance with terms and conditions set out in the shareholders' agreement.
GCL is in the process of developing a greenfield cement plant in Gulbarga, Karnataka, which will, once set up, have an annual capacity of 3 million MT and 50 MW Power Plant. In respect of the same, GCL holds a limestone mining lease for 989 hectares of land in Gulbarga, Karnataka.
Zuari Industries, part of the K.K. Birla Group, was incorporated as Zuari Agro Chemicals to manufacture urea and complex fertilizers. The company forayed into various business areas such as cement, furniture, hybrid seeds, engineering consultancy, financial services, and oil tanking through a route of subsidiaries and joint ventures.