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India Cements will have to merge Raasi, say analysts
N Madhavan & Abhinaba Das
CHENNAI/MUMBAI, April 6: Experts in the mergers and acquisitions (M&A) game say that India Cements Limited would be left with no option but to ultimately merge Raasi, Visaka and the investment companies with India Cements Limited. This is because, though the investment companies had acquired shares in Raasi and Visaka, they were funded entirely by India Cements Limited from borrowings. India Cements Limited would be incurring huge interest outgo and the returns to it could be by way of paltry dividend as result the shareholders of India Cements Limited would be greatly affected. But by merging all the companies, the common holdings will get cancelled and the shareholders of India Cements Limited would enjoy the profits of Raasi Cement and Visaka Cements.Informed sources say that once the takeover process is completed the merger would not be far away. But it remains to be seen if Visaka Cements is also merged as it enjoys certain sales tax concessions which it will lose if it loses its identity. Copyright © 1998 Indian Express Newspapers (Bombay) Ltd.
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