From Our Special Correspondent
New Delhi: The French cement major Lafarge which was involved in controversial mining in Meghalaya for its cement plant in neighbouring Bangladesh might sell its stake and leave the country entirely despite the growing demand for cement in the region. According to reports, Lafarge is in talks with private equity and financial firms to sell a 20-25 per cent stake in its India unit for around Rs 1650 crore. The world’s largest cement maker has contacted firms like Kohlberg Kravis Roberts and Co and Temasek Holdings Pvt Ltd, sources said, with a potential deal valuing Lafarge’s Indian operations at around $1.2 billion.
Lafarge may also exit India entirely if it gets a strategic investor to buy its operations in the country, sources said.
Lafarge started its India operations after buying out Tata Steel’s cement business in 1999 and expanded by buying Indian engineering conglomerate Larsen and Toubro’s ready-mix concrete business in 2008.
Lafarge may also exit India entirely if it gets a strategic investor to buy its operations in the country, reports said. The cement company is in a drive to shed non-core assets to cut its debt. A stake sale in its Indian unit would come at a time when analysts expect demand for cement to start recovering, driven by a government push to expedite infrastructure projects, especially ahead of general elections due by 2014.
Cement sales growth has been slow this year in India as a result of sluggish homebuilding and construction in Asia’s third-largest economy and margins of cement makers have been pressured due to an increase in the cost of fuel and transport.