Barak Valley Cements Acquires 98.08% Stake in Mustoh Cements
Filing Summary
Barak Valley Cements Ltd has acquired 25,53,882 equity shares in Mustoh Cements Limited, converting an outstanding loan of ₹2,55,38,826 into equity. This transaction results in Barak Valley Cements holding a 98.08% stake in Mustoh Cements, making it a subsidiary. The acquisition was executed through a preferential allotment and is classified as a related party transaction. Mustoh Cements, incorporated in 2010, has yet to commence commercial operations. The acquisition was completed without any cash consideration, with shares issued at face value.
Barak Valley Cements Ltd has acquired 25,53,882 equity shares of Mustoh Cements Limited through a preferential allotment. This acquisition was executed by converting an outstanding loan amounting to ₹2,55,38,826 into equity shares. As a result, Barak Valley Cements now holds 98.08% of the equity share capital of Mustoh Cements, establishing it as a subsidiary of Barak Valley Cements.
The financial terms of the acquisition involved the conversion of an outstanding unsecured loan into equity shares. The shares were acquired at their face value of ₹10 per share, with no premium applied. The transaction did not involve any cash consideration, as it was completed through the conversion of the existing loan amount.
Mustoh Cements Limited was incorporated with the objective of setting up a cement manufacturing plant in Meghalaya. However, the company has not yet commenced its commercial activities, and therefore, it has reported no turnover in the past three financial years. The acquisition falls under the category of a related party transaction, as the promoters of both Barak Valley Cements and Mustoh Cements share common interests. The transaction was conducted on an arm’s length basis.
The acquisition process did not require any governmental or regulatory approvals. The conversion of the loan into equity shares was completed within a month. The transaction was carried out to settle the outstanding loan that Barak Valley Cements had provided to Mustoh Cements for the acquisition of land and mines in Meghalaya.
Mustoh Cements Limited was established on May 3, 2010, with plans to manufacture cement and cement clinker. Despite securing land and limestone mines, the company has not initiated the installation of its plant or started manufacturing operations. The company is based in India and has not reported any turnover in recent years.
Barak Valley Cements Ltd is engaged in the manufacturing and sale of cement and related products. The company focuses on expanding its market presence and enhancing its production capabilities. By acquiring a majority stake in Mustoh Cements, Barak Valley Cements aims to strengthen its position in the cement industry.