Dalmia Bharat through its wholly-owned subsidiary Dalmia Cenent has entered into a binding framework agreement to acquire the cement, clinker and power plants of Jaiprakash Associates Limited (JAL) for an aggregate enterprise value of ₹5,666 crore.
The agreement covers divestment of the cement, clinker and power plants having aggregate cement capacity of 9.4 mtpa, along with clinker capacity of 6.7 mtpa and thermal power plants of aggregate capacity of 280 MW.
The acquisition will enable New Delhi-headquartered Dalmia Cement to expand its footprint into the central India region and as a pan-India company with 75 million tonnes capacity by FY27 and 110-130 million tonnes by FY31. More than 50 per cent of Jaypee Group’s cement capacity is located in Central India.
This latest transaction, once approved by regulators, would see the complete exit of Jaiprakash Associates from the cement business.
Exiting cement biz
“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”, Manoj Gaur, Executive Chairman, JAL said as part of the deal announcement.
The plants that are being sold under this deal 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, JV partner of JAL and regulatory authorities.
JAL had in recent decade been taking steps to reduce its debt and repay to lenders and meet its commitments on pro active basis. It had divested over 20 mtpa cement capacity favouring UltraTech Cement Limited during 2014 and 2017, while selling its controlling stake of more than 2 mtpa capacity to Dalmia Group in 2015.
To fulfill the commitment to reduce its debt, the Group has already divested its various cement and power plants to other leading industrial Groups. According to Jaypee Group, the present transaction with Dalmia Group yet again demonstrates the quality of its assets.
Back in October, JAL and Jaiprakash Power Ventures had announced plans to divest their cement business as well as some non-core assets to reduce debt,