Dalmia Cement (Bharat) has acquired remaining 26 per cent stake in Bokaro Jaypee Cement Ltd (BoJCL) from Steel Authority of India Ltd (SAIL) for Rs 234.56 crore ($38 million). Simultaneously it has also completed the previously announced deal to buy Jaiprakash Associates' 74 per cent in the venture, thereby completing the buyout of the unit.
It paid Rs 667.56 crore ($109 million) to buy the 74 per cent stake as against the disclosure early this year, where it said it will pay Rs 690 crore, as per a stock market disclosure.
The total enterprise value of the unit, however, remains unchanged at Rs 1,150 crore, including debt.
With this, BoJCL has become a wholly-owned subsidiary of Dalmia Cement (Bharat).
BoJCL has a 2.1 MTPA capacity cement plant at Bokaro in Jharkhand. It is fed by slag supplied by a steel plant operated by SAIL in the city. Last year it had capacity utilisation of 72 per cent.
It recorded revenues of Rs 740 crore for the year ended March 31, 2014 against Rs 627 crore in FY13. The firm's net profit, however declined to Rs 30.2 crore from Rs 136 crore the previous year.
With this new acquisition, Dalmia Cement’s current installed cement capacity (including subsidiaries and associates) will reach 21 MTPA.
This is the third such move by the company in the last two years. In late 2012, Dalmia Cement (Bharat) signed an agreement to buy Adhunik Cement, a privately held firm based in Kolkata with cement manufacturing units located in Meghalaya, for Rs 560 crore ($105 million then) in multiple tranches. Adhunik Cement has its manufacturing facility in the Jaintia Hills in Meghalaya, and cement is produced by the Adhunik Group’s JV with the MSP Group. The fully integrated cement plant with a capacity of 1.5 million tonnes per annum also operates a 25 MW power plant.
Soon thereafter, Dalmia Cement (Bharat) raised its holding in Kolkata-based Calcom Cement India Ltd for Rs 77.19 crore ($14 million). The firm already held 50 per cent stake in Calcom Cement which it had acquired in January 2012.
Calcom is a manufacturer of OPC and PPC cement and is currently expanding its consolidated cement manufacturing capacity to 2.1 million tonnes per annum.
Dalmia Cement (Bharat) is a subsidiary of the public listed Dalmia Bharat (previously Dalmia Bharat Enterprises). Dalmia Cement, which appointed Mahendra Singhi, former executive director at Shree Cement, as its new CEO last year, counts PE giant KKR as a shareholder. In 2010, KKR had invested Rs 750 crore in an unlisted arm of Dalmia Cement (Bharat) called Avnija Properties.
(Edited by Joby Puthuparampil Johnson)