Barely a month after selling its hydropower projects, debt-ridden Jaiprakash Associates Ltd on Tuesday sealed a deal with UltraTech Cement to divest two of its cement units in Madhya Pradesh.

The two companies said in separate statements that the enterprise value of the deal is ₹5,400 crore. UltraTech will subsume the debt of the projects with no cash transaction involved, sources associated with the deal told BusinessLine .

The deal is for the 2.6 million tonne plant in Bela, which also has a 25-MW captive power plant, and the 2.3 million tonne cement plant in Sidhi with a 155-MW captive power plant. UltraTech had also bought Jaypee Group’s cement manufacturing unit in Gujarat last year in a deal worth ₹3,800 crore.

With this, UltraTech’s capacity will go up to 65 million tonnes per annum, in line with the company’s target of reaching 71 million tonnes per annum capacity by 2016.

“The divestment is in line with the Jaypee Group’s publicly announced policy of bringing down Jaiprakash Associates debt and improving its balance sheet,” a Jaypee Group statement said. Jaiprakash Associates is the holding company for Jaypee Group’s cement, infrastructure and real estate business.

It added that till date the Group has divested assets over ₹20,000 crore. Its most recent divestment was of the two hydro power plants — Karcham Wangtoo and Bapsa II — for ₹ 9,700 crore to Sajjan Jindal’s JSW Energy.

Even after the latest sale, Jaypee Group will continue to be the third-largest cement manufacturer in the country with a 22 million tonne annual capacity, said Manoj Gaur, Executive Chairman, Jaiprakash Associates, in a statement.

The deal is particularly important for the Jaypee Group to meet its debt reduction target. With over ₹56,000 crore of consolidated debt, the Group is trying to trim its outstanding by ₹15,000 crore in the current fiscal. The asset-sale programme has not been easy for the Jaypee Group, which saw two deals for its hydro power asset falling through earlier in the year.

“The acquisition will create significant synergies and the surplus clinker will enable the company augment its capacity further and enhance its presence in Madhya Pradesh,” UltraTech said in a statement.

The transaction is subject to approval from regulatory bodies.