Ultratech Cement today said it has called off a deal with Jaiprakash Associates (JAL) to acquire its two plants in Madhya Pradesh for an enterprise value of Rs 5,400 crore.
“The Bombay High Court has indicated that based on the recent amendments in the provisions of the Mines and Minerals Act, 1947 (MMDRA), preventing transfer of mines granted other than through auction, and in absence of any clear timelines for any amendment/clarifications in MMDRA, the court cannot sanction this scheme,” Ultratech Cement said in a BSE filing.
It further said: “Under the circumstances, it was decided to apply for withdrawal of the scheme filed before the Bombay High Court, which was permitted by the High Court at the heading held on February 25.”
In one of the biggest deals in the cement sector, in December 2014, Aditya Birla group firm Ultratech had said it will acquire two plants from Jaiprakash Associates (JAL) in Madhya Pradesh for an enterprise value of Rs 5,400 crore.
Ultratech, country’s largest cement maker, had said its board has approved the acquisition of JAL’s Bela unit which has 2.1 million tonnes per annum (mtpa) clinker and 2.6 mtpa cement grinding capacity.
The other unit, located at Sidhi, has 3.1 mtpa clinker and 2.3 mtpa cement grinding capacity. Both units have a total of 180 MW power generation capacity.
The acquisition would create significant synergies and the units would add 4.9 mtpa capacity immediately, it said, adding that the surplus clinker would enable Ultratech to augment its cement capacity by a further 1.8-2.5 mtpa.
Following the acquisition, Ultratech’s cement capacity in India would have increased from around 60 mtpa to around 65 mtpa and with projects underway, it would have go up to around 71 mtpa by 2016.
Debt-ridden Jaiprakash Associates has been selling cement and power assets to pare debt and improve its balance sheet.