Dalmia Bharat to buy cement, power business of Jaiprakash Associates
Dalmia Cement (Bharat) Limited (DCBL), a wholly owned subsidiary of Dalmia Bharat Limited, will buy cement business of Jaiprakash Associates Limited (JAL) for an aggregate Enterprise Value of Rs.5,666 crore. Jaiprakash Associates Limited informed the exchanges on 12 December 2022.
“This is to inform you that in line with the company’s continuing endeavour to reduce its debt and as approved by the Board of Directors of the company, based on the recommendations of its Audit Committee, at the meeting held today – 12 December 2022 — a binding Framework Agreement has been signed by the Company and its associate company for divestment of the Cement, Clinker and Power Plants having aggregate Cement capacity of 9.4 MnTPA, along with Clinker capacity of 6.7 MnTPA and Thermal Power plants of aggregate capacity of 280 MW, to Dalmia Cement (Bharat) Limited (DCBL), the wholly owned subsidiary of Dalmia Bharat Limited, for an aggregate Enterprise Value of Rs.5,666 crores,” the company said in a statement.
The plants are situated at Madhya Pradesh, Uttar Pradesh, and Chhattisgarh.
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.
Manoj Gaur, executive chairman of Jaiprakash Associates Limited said that the 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 UltraTech Cement Limited during 2014 and 2017, while selling its controlling stake of more than 2 MTPA cement capacity to Dalmia Group in 2015. 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 Dalmia 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,” Gaur said in a press statement.
The Jaypee group has been battling with high debt and it has lost one of its group companies Jaypee Infratech to insolvency.
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