C K Birla's Orient Cement to buy 2 Jaypee units for rs1,946 crore
CK Birla Group firm Orient Cement Ltd will acquire debt ridden Jaypee Group's two firms for a total consideration of Rs 1,946 crore in an all cash deal.
Orient Cement Ltd (OCL) has signed definitive agreements with Bhilai Jaypee Cement and Nigrie Cement Grinding Unit for the transactions that is expected to be completed before March 31, 2018.
As part of the agreement, OCL will acquire 74 per cent stake in Bhilai Jaypee Cement Ltd (BJCL) from Jaiprakash Associates Ltd (JAL) and its nominee for Rs 1,450 crore, the company said in a BSE filing.
It will also acquire Nigrie Cement Grinding Unit as a going concern from Jaiprakash Power Ventures (JPVL) for Rs 496 crore.
BJCL has a cement manufacturing capacity of 2.20 million tonnes (MT) and 1.10 MT of clinker. In 2015-16, it had a turnover of Rs 399.27 crore.
"BJCL is in the same line of business as that of the company and the purpose of acquisition is to expand the business of the company to other parts of the company," OCL said.
The deal would, however, be subject to adjustment on account of working capital and net debt of BJCL, which shall then be pro-rated to the shareholding of JAL in BJCL (74 per cent).
Nigrie Cement Grinding Unit, based in Singrauli, Madhya Pradesh, has a production capacity of 2 MT. It had a turnover of Rs 90.70 crore in 2015-16, contributing 1.92 per cent of JPVL's total turnover.
OCL however said it requires "approval of government of Madhya Pradesh for transfer of land" for the transaction to be materialised.
Confirming the development, JPVL said in a separate filing that it executed an agreement with OCL for sale of 2 MT Nigrie Cement as a going concern basis at a consideration linked to a total enterprise value of Rs 496 crore.
JPVL is a power generation company with a capacity of 2,220 MW comprising one hydro and two thermal power plants.
The Jaypee group has been selling off its assets to lighten its debt load reported to be around Rs 40,000 crore.
Last year, it announced sale of its cement plants with a total capacity of 21.1 MT at an enterprise value of Rs 16,189 crore to the Aditya Birla Group firm UltraTech Cement.
In February this year JPVL had alloted 305.80 crore equity shares to its lenders as part of debt restructuring scheme, which would reduce the debt of Rs 3,058 crore.
Following the allotment, financial institutions have 51 per cent equity share in the company.
Shares of Orient Cement Ltd on Wednesday settled at Rs 144.60, down 1.70 per cent, on BSE.