KKR exits stake in India's Dalmia Cement, invests in parent company
KKR has agreed to sell its stake in India's Dalmia Cement Bharat (DCBL) for INR6 billion ($89 million) to the parent company Dalmia Bharat (DBL), and to invest INR6.2 billion in DBL itself.
DBL will issue 7.5 million shares to KKR at INR825 apiece, while paying the GP cash for the DCBL stake. As a result, DCBL will become a wholly owned subsidiary of DBL, and KKR will acquire an 8.5% stake in DBL, according to a regulatory filing.
The goal of the transaction is to simplify DCBL's ownership structure. KKR first invested in DCBL in 2010, paying INR7.5 billion for a 20% stake in the company's subsidiary Avnija. The investment in DBL will make it the company's largest institutional shareholder.
"We have benefited tremendously from KKR's global network, strategic expertise and experience in value creation," said Puneet Dalmia, managing director of DCBL. "Post the investment by KKR, the company has successfully completed four acquisitions, greenfield expansions and implementation of environmentally sustainable production processes in a cost effective manner."
DBL was founded in 1935, and launched DCBL in 1939. The parent company is a conglomerate with interests in the sugar, mining and electronics industries, as well as travel agents.
According to the most recent annual report, the company recorded net revenue of INR1.8 billion for the year ended March 2015 - down from INR2.3 billion the year before. Over the same period, net profit dropped from INR630 million to INR37 million.
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