Nuvoco Vistas Corporation Ltd, a leading cement manufacturer in East India, has been declared the successful resolution applicant for Vadraj Cement Ltd (VCL) under the Corporate Insolvency Resolution Process (CIRP). The Committee of Creditors (CoC) approved Nuvoco’s resolution plan, issuing a Letter of Intent (LOI) to confirm the selection. The acquisition will be executed through Vanya Corporation Private Ltd, a wholly-owned subsidiary of Nuvoco Vistas.
Strategic Expansion
Vadraj Cement, previously owned by ABG Shipyard and based in Gujarat, operates a 6 million tonne grinding unit in Surat. This acquisition will increase Nuvoco’s production capacity by over 20%, adding to its existing 25 million tonne capacity. Vadraj Cement also boasts a clinker capacity of 3.5 million tonnes in Kutch, Gujarat, alongside limestone reserves and a captive jetty.
Enhanced Production Capacity
This transaction will elevate Nuvoco’s total cement production capacity to approximately 31 million tonnes per annum (MMTPA), with 19 MMTPA in the East, 6 MMTPA in the North, and 6 MMTPA in the West, solidifying its position as the fifth-largest cement group in India.
Financial Considerations
Nuvoco plans to fund the acquisition without significantly increasing its consolidated debt levels. As of September-end, Nuvoco’s net debt stood at Rs 4,501 crore, and it had incurred a loss of over Rs 82 crore for the April-September period. The company plans to reduce its debt to Rs 3,500-4,000 crore by March 2025.
Future Investments
Nuvoco also intends to invest in Vadraj Cement over the next 15 months to refurbish its assets and enhance operations, aiming to begin production by the end of the fiscal year.
This strategic acquisition aligns with Nuvoco Vistas’ growth objectives and reinforces its commitment to expanding its footprint in the Indian cement industry.
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