JSW ISPAT Steel Ltd has struck a deal to acquire the cement grinding facility of Heidelberg Cement India Ltd located at Dolvi in Maharashtra, for an undisclosed amount. The unit is adjacent to the company's steel plant.
The acquisition is proposed by way of a 'slump sale' and shall be subject to obtaining necessary approvals and completion of due diligence, the firm said on Tuesday.
The cement grinding facility has an installed capacity of 0.60 MTPA and its acquisition would help the company develop an outlet for evacuation of slag generated from its steel plant.
In a separate statement Heidelberg Cement said: “The company had been exploring possible ways of improving margins of this grinding unit, including the possibility to scale up operations but the same was not feasible due to infrastructural bottlenecks. The company has therefore decided to divest its interest in the unit.”
The Indian arm of the German building materials firm has been in the news for a rumoured deal where private equity firms may pick a minority stake in the company. If it transpires, it could be the second such deal in the cement industry after the Lafarge India sold a stake to financial investors last week.
Media reports have speculated that Bain Capital may pick a little over 10 per cent in the firm though others such as Carlyle are also said to be in race for a deal. Heidelberg Cement operates two integrated cement units besides two grinding plants in India.
Heidelberg Cement share price skid 1.19 per cent to close at Rs 45.5 a unit on the BSE in a weak Mumbai market on Tuesday. JSW ISPAT Steel scrip also declined 1.6 per cent and last traded at Rs 9.32 a share.