Displaying items by tag: GCW258

Boy, is the UltraTech Cement and Jaiprakash Associates deal dragging on. The agreement by UltraTech to buy cement plants from Jaiprakash Associates reached its latest revision this week when UltraTech upped its offer to US$2.40bn from the US$2.36bn offered at the end of March 2016. The deal also includes an additional US$70m for a cement grinding plant under construction in Uttar Pradesh.

This time round the haggling took place to the background music of Jaiprakash Associates’ mounting debts. It owes US$4.45bn to a group of lenders led by ICICI Bank. A repayment window was due to close on 30 June 2016. Defaulting this deadline could have switched the account to non-performing asset status. So, according to reports in the Indian media, the lenders forced a strategic debt restructuring scheme on Jaiprakash Associates. Or in other words they took control of the company. Alongside all of this UltraTech was allegedly trying to renegotiate the terms of the deal agreed in March 2016 following amendments to the Mines and Minerals (Development and Regulation) (MMDR) Amendment Act, 2015.

How paying more for the same assets benefits UltraTech remains to be seen. In addition US$1.78bn worth of Jaiprakash Associates’ debts will be transferred to UltraTech, according to Rahul Kumar, Director & CFO of Jaiprakash Associates. At US$118/t for new-ish production capacity it still seems like a good deal. Doubtless the devil lies in the (unseen) detail. Reports in the Indian media speculate that the lenders may have threatened UltraTech with rival bids.

To add to the confusion, the deal covers cement plants with a production capacity of 21.2Mt/yr but this total includes both integrated cement plants (clinker producing) and standalone cement grinding plants. Given the difference in cost to build a clinker production line compared to a grinding mill this makes assessing the value of the deal difficult.

UltraTech have described the purchase as a ‘geographic market expansion,’ which will allow its entry into markets of India including the Satna cluster in
Uttar Pradesh and Madhya Pradesh, Himachal Pradesh, Uttarakhand and coastal Andhra Pradesh. It has also stated that its cement production capacity (clinker and grinding) will rise to 91.1Mt/yr following the deal. As ever, the latest revised agreement is dependent on shareholder, creditor, high court and regulatory approval. UltraTech plan to complete the transaction by July 2017. What can possibly go wrong!?

Switzerland: LafargeHolcim has appointed Alessandra Girolami as the group’s new Head of Investor Relations from 1 September 2016. Girolami will report to group chief financial officer Ron Wirahadiraksa. She replaces Michel Gerber, who will leave the group.

Girolami joins LafargeHolcim from the Carrefour Group, where she has been in Investor Relations since 2005 and Head of Financial Communications and Investor Relations since 2014. She began her career at ABN AMRO as a sell-side analyst. Girolami graduated from ESCP Europe with a major in finance and holds a postgraduate degree in Applied Economics from the Institut d’Etudes Politiques in Paris.

Germany: Eric Jaschke has been appointed Chief Financial Officer (CFO) at Schenck Process Group with effect from 1 July 2016. Jaschke will preside over the Schenck Process Group’s global financial organisation, working closely with Andreas Evertz, President and Chief Executive Officer (CEO). Jaschke has already fulfilled the role of CFO on a provisional basis since October 2015.

Jaschke started his career at Schenck Process in 1999 as a specialist for international controlling. In this capacity he focused on building and advancing a management information system. He was CFO of Schenck Process Australia from 2006 to 2007 and became Managing Director of the company in Australia at the start of 2008. Jaschke returned to Germany in 2012 and led the Business Unit Heavy in Darmstadt, one of the four core Business Units of Schenck Process.

Jaschke holds a master’s degree in business administration at the Macquarie Graduate School of Management in Sydney, Australia. He gained his bachelor’s degree at the Baden-Württemberg Cooperative State University in Mannheim, Germany.