On Monday, the Jaypee Group announced the signing of a legally binding deal to sell its cement division to Dalmia Cement (Bharat) Ltd for an enterprise value of Rs5,666 crore.
Jaiprakash Power Ventures and Jaiprakash Associates have both signed the legally binding document.
The Jaypee Group companies said in a press that the divestiture includes cement facilities with a combined capacity of 9.4 million tonne, clinker assets with a capacity of 6.7 million tonne, and a thermal power plant with a capacity of 280 MW.
The primary purpose of the money raised by the sale of the cement business to Dalmia Bharat is to pay off the debt owed by Jaiprakash Associates.
The Dalmia Group and debt-ridden Jaiprakash Associates have agreed to the sale of two assets. In 2015, the company sold the Dalmia Group the majority ownership of cement production facilities with a 2 MTPA capacity. To fend off a proposal from its lenders to declare bankruptcy, the group has been making a number of efforts to reduce debt.
Jaiprakash Associates sold cement assets with a capacity of more than 20 MTPA to UltraTech Cement between 2014 and 2017.
The Dalmia Group is currently purchasing cement and clinker production capacity from plants in Madhya Pradesh, Uttar Pradesh, and Chhattisgarh.
According to rumours, the Adani Group, which recently purchased the cement assets of the Holcim Group in India, had made an offer of Rs5,000 crore to purchase the cement assets of Jaiprakash Associates.
Although UltraTech Cement apparently expressed interest as well, the cement giant withdrew due to disagreements over valuations.
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