Shree Cement Ltd has signed a deal to acquire a cement grinding unit of Jaiprakash Associates Ltd located at Panipat in Haryana for Rs 360 crore (around $60 million), as per a stock market disclosure. The plant has a capacity of 1.5 MTPA.
The deal is subject to adjustment for any financial indebtedness and net working capital as of the closing date. It is also subject to satisfactory completion of due diligence and obtaining necessary approvals and consent.
This marks another deal by Jaypee Group to sell assets to pare debt. In September last year Jaypee Cement had sold off two units with a combined capacity of 4.8 million tonnes in Gujarat to the Aditya Birla Group’s cement firm UltraTech.
More recently, KKR-backed Dalmia Cement (Bharat) struck a deal to buy 74 per cent held by Jaiprakash Associates in its cement joint venture with steel maker SAIL for Rs 690 crore.
VCCircle had first reported in January that Jaiprakash Associates, the third-largest cement maker in the country, is looking to sell off more units as the debt laden group goes about balancing its books.
In another asset sale, recently, Reliance Power signed an agreement to buy all three operational hydro power assets of Jaiprakash Power Ventures Ltd (JPVL) in one of the largest deals in the infrastructure sector.
The total debt of Jaiprakash Associates stood at Rs 61,100 crore as of March 31, 2014.
Shree Cements with presence across Rajasthan, Uttaranchal and Bihar, has a capacity of 17.5 million tonnes per annum, according to its website. The deal expands its presence in north India.
In an unrelated development, Shree Cement board took note of superannuation of Ashok Bhandari, chief financial officer of the company. He will continue to serve as advisor of the company.
Shree Cement has named Subhash Jajoo, currently general manager (Finance) as new CFO.
(Edited by Joby Puthuparampil Johnson)