Rain Commodities Ltd, a leading player in calcined petroleum coke (CPC), is planning to restructure operations by spinning off its cement division into a subsidiary. The spin-off is mainly to induct a strategic partner in cement business at a later date.
“We hope to complete the restructuring and create a separate cement subsidiary by the year-end,” T Srinivasa Rao, the company’s vice-president (finance), told DNA. The company follows January-December calendar for financials.
Rain produces cement and markets it under Priya Cement brand in Andhra Pradesh, Tamil Nadu and Karnataka. It has manufacturing facilities in Andhra Pradesh with a total capacity of about 3.16 million tonnes.
Rao said the restructuring is being taken up primarily to induct a strategic partner.
“It is too early to talk about a partner. We will first focus on the restructuring exercise,” he said.
However, the company has no plans to raise funds or expand the cement capacity at this point of time. Though it is yet to finalise the mode of inducting the partner, Rao said, “In any business we will remain the majority partner. That might imply that we will offer 49% to the partner. But even that is something which we have not thought of.”
Though the talk on the street suggested that the hive-off was primarily to raise funds to discharge debts, Rao said, “The debt in cement is hardly Rs 100 crore. So, the restructuring is not for it.”
Despite having cement capacities, the company depends on CPC business for most of its revenues (about 80%). Its 2.5 million tonne CPC production is spread between the US and India facilities with about 1.9 million tonne coming from the US and rest from India. Currently, the company is in the process of adding capacities at its plant in Visakhapatnam.
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