Orient Cement Signs Definitive Agreement For Jaypee Cements’ Assets
Orient Cement will buy 74 percent stake in Jaiprakash’s Bhilai Cement plant for Rs 1,450 crore.
Shares of Jaiprakash Associates Ltd. and Jaiprakash Power Ventures Ltd. gained the most year-to-date, before ending the day flat on Wednesday after the Jaypee Group announced that it had entered into a definitive agreement with Orient Cement Ltd. to sell its Nigrie Grinding unit and Bhilai Jaypee Cements Ltd. (BJCL) for Rs 1,946 crore.
CK Birla Group-promoted Orient Cement had announced that it had entered into an agreement to acquire these two assets from the Jaypee Group in October 2016,
Orient Cement will be paying Rs 1,450 crore for 74 percent stake in BJCL, in an all-cash deal. Steel Authority of India Ltd. holds the remaining 26 percent stake at BJCL. The plant has an installed cement capacity of 2.2 million tonnes per annum.
The acquisition, subject to approval of Steel Authority of India, BJCL lenders and adjustment on account of working capital is expected to by completed by March 31, 2018.
The Nigrie acquisition will be done at a cash consideration of Rs 496 crore, subject to approval from the government of Madhya Pradesh for the transfer of land. Orient Cement expects the deal to be completed by March 31, 2018, according to the company's statement on the exchanges.