Dalmia Bharat has signed an agreement with Jaiprakash Group's subsidiary companies—Jaiprakash Associates and Jaiprakash Power Ventures—to acquire its cement and power plant businesses for an enterprise value of Rs 5,666 crore.
The divestment of cement and power plants businesses by Jaiprakash Group is part of its strategy to reduce debt.
As of March 2022, the company had total debt of Rs 27,000 crore, according to reports.
The company announced divestment of cement business, which has capacity of 9.4 million tonnes and clinker capacity of 6.7 million tonnes. Its thermal power plants have an aggregate capacity of 280 megawatts, Jaiprakash Group said in a press release.
The plants are located in Madhya Pradesh, Uttar Pradesh, and Chhattisgarh.
"Jaiprakash Associates Ltd. (JAL), the flagship company, has been taking steps to reduce its debt and repay to lenders and meet its commitments on pro active basis. In this regard, JAL had divested more than 20 MTPA cement capacity in favour of MIs. UltraTech Cement Limited during 2014 and 2017, while selling its controlling stake of more than 2 MTPA cement capacity to Oalmia Group in 2015," said Manoj Gaur, Executive Chairman Jaiprakash Associates Limited.
"In order to repay the loans of lenders and concentrate in its other core areas of working, JAL has decided to divest from cement business completely. With the sale of cement capacity of 9.4 MTPA in favour of Oalmia Cement (Bharat) ltd. (DCBL), we hope and pray having demonstrated its creditable working, JAL will further 'cement' its credentials of being a trustworthy organization in infrastructure segment of the country in times to come," he added.
The transaction is subject to due-diligence, receipt of the requisite statutory approvals and necessary compliances including the approvals from lenders J JV partner of JAL and regulatory authorities.
Jaiprakash Associates shares surged 10 per cent to close at Rs 11.74 and Jaiprakash Power Ventures climbed 10 per cent to settle at Rs 8.30.
