Mumbai: The race for Harshad Mehta's 11 per cent stake in Associated Cement Company (ACC) is intensifying with the Swiss cement major Holcim joining the bid. Holcim's financial advisor McKinsey, on Friday, submitted the bid proposal to the custodian of Mehta's shares, say sources close to the development.
Besides Holcim, Lafarge, Life Insurance Corporation, Punjab National Bank and State Bank of India are the other major bidders for Mehta's ACC shares. The custodian has put 8 October as the last date for submitting the bid and it is expected that within a week's time the special court will come out with a final verdict.
Industry sources say Gujarat Ambuja Cements Ltd (GACL), which holds a 14.4 per cent stake in ACC, is exploring the possibility of roping in Holcim, which may eventually result in the latter ending up with a substantial stake in ACC.
Holcim's first focus will be Mehta's 11 per cent stake in ACC and a minority stake in Ambuja Cement India Ltd, the holding company for GACL's ACC shares.
The sources, however, say Holcim needs a crucial no-objection from the ACC board even if it emerges as the highest bidder for the ACC shares currently held by the custodian. GACL, with a 14.4 per cent stake in ACC, has two nominees on the board - Narotam Seksaria and AL Kapur.
The consent of GACL will be crucial for Holcim to pick up the stake. Besides, ACIL also has a 94 per cent holding in Ambuja Cement Eastern Ltd. These two factors are believed to have brought Holcim and Gujarat Ambuja to the negotiating table.
ACIL was incorporated in April 1999 as a wholly owned subsidiary of GACL. In February 2000, AIG's Asian Institutional Fund II LP, the AIG Asian Opportunity Fund and General Insurance Corporation's Special Investments Pte Ltd had invested Rs 571.4 crore for a 40 per cent stake. GACL subscribed 60 per cent for Rs 857.1 crore.