UltraTech Cement Limited has entered into an Energy Supply Agreement and a Share Subscription and Shareholders Agreement to acquire a 13.99% equity stake in FPEL SERVICES PRIVATE LIMITED for Rs 12.09 crore in cash. FPEL SERVICES PRIVATE LIMITED is a special purpose vehicle engaged in the generation and transmission of renewable energy through wind power.
The target entity will supply 15.70 MW AC wind power to UltraTech Cement's manufacturing plants in Tamil Nadu from a wind project located at Karur village in the state. FPEL SERVICES PRIVATE LIMITED was incorporated on 14 December 2022 and has reported nil turnover in each of the last three financial years.
The India Cements Limited, a subsidiary of UltraTech Cement, has also entered into similar agreements to acquire a 12.48% equity stake in FPEL SERVICES PRIVATE LIMITED. The subsidiary's investment amounts to Rs 10.78 crore in cash, bringing the combined investment by the UltraTech Cement group in the entity to Rs 22.87 crore.
UltraTech Cement is pursuing the acquisition to meet its green energy requirements for its manufacturing operations. The investment will help UltraTech Cement optimise energy costs and comply with regulatory requirements for captive power consumption under electricity laws. The wind power sourced through this arrangement is intended for captive use at UltraTech Cement's plants in Tamil Nadu.
The proposed acquisition is not a related party transaction, and the promoter or promoter group companies hold no interest in the target entity. The transaction is expected to be completed within 180 days from the execution of the agreements. The disclosure was made to the stock exchanges under Regulation 30 of the SEBI Listing Obligations and Disclosure Requirements Regulations.
Disclaimer: This article is based on company filings submitted to the Bombay Stock Exchange (BSE) and National Stock Exchange of India (NSE) and is for informational purposes only. It does not constitute investment advice or a recommendation. Investors should conduct their own research and consult a qualified financial advisor before making investment decisions.