ACC, Ambuja Cements to pay 1% royalty to Holcim
With the decision of ACC and Ambuja Cement to pay one per cent royalty to their parent Holcim, the two companies' earnings will have only a marginal impact. The two companies boards recently gave nod to pay the one per cent royalty to Holcim.
This should mitigate the concerns of the investors, who were expecting a higher royalty outgo. The boards of ACC and Ambuja Cements have agreed to pay 1 per cent of their sales as technology and knowhow fees to Holcim, Switzerland with effect from CY13.
This is marginally higher than the existing royalty payment, which was about 0.6 per cent to 0.7 per cent of sales in 2011 and 2012, but lower than the anticipated 2 per cent of sales, which the parent company had earlier hinted at.