Heidelberg gets merged with Emirates duo

Heidelberg Cement Bangladesh Limited, which is listed on the Dhaka stock exchange, has obtained approval to merge with Emirates Cement Bangladesh Limited and Emirates Power Company Limited, respectively.

The High Court gave the approval in response to the company's application on Tuesday.

Earlier, Heidelberg Cement received approval of the shareholders to merge with the two Emirates companies through the AGM.

According to the company, in November 2019, Heidelberg Cement decided to buy 100% stake in Emirates Cement and Emirates Power from Ultratech Cement Middle East Investment Limited. Heidelberg has offered the duo Tk 182.59 crore.

It was then in October last year when Heidelberg's board of directors approved a draft proposal to merge with the two companies. The High Court and respective shareholders were required to endorse such schemes before final implementation.

Accordingly, Heidelberg Cement, Emirates Cement and Emirates Power filed a joint application with the High Court under Sections 228 and 229 of the Companies Act, 1994 to get approval for the consolidation scheme.

The High Court approved the consolidation scheme in February this year. After receiving the approval of the High Court, Heidelberg Cement convened a special general meeting (EGM) on May 2 this year to get the approval of its shareholders.

Ultratech Cement had started production in Bangladesh in 2010 with the acquisition of ETA Star Cement of Aditya Birla Group of India. Later, Aditya Birla Group formed a subsidiary company naming Emirates Cement in Bangladesh.

Struggling to keep pace with the aggressive business strategies of local producers, Heidelberg focused on expanding its business to maintain its presence in the cement market. Following this, they decided to buy Emirates Cement and Emirates Power in Bangladesh.

Heidelberg Cement also acquired Meghna Energy Limited last year as part of its business expansion. The company spent Tk 91.7 crore to buy 99.99 percent shares of Meghna Energy with premiums.

According to the latest unaudited financial report, the company did well in the first two quarters of the current fiscal year (January-June ’21). But in the third quarter (July-September '21) the company again fell into losses.

In the third quarter, the company lost Tk 1.91 per share. In the last 9 months (January-September '21), the company's earnings per share (EPS) has been Tk 9.88. At the same time, the company's net asset value per share (NAV) was Tk 76.04.