Dalmia Bharat Ltd. has entered into agreements to acquire cement and power assets of Jaypee Group, for an enterprise value of Rs 5,666 crore.
The Jaypee Group, formally known as Jaiprakash Associates Ltd., will sell its clinker, cement and power plants to the Dalmia Bharat Group—subject to due diligence, approval from lenders and JV partners of Jaiprakash Associates and regulatory authorities.
The acquisitions amount to cement capacity of 9.4 million tonnes, along with a clinker capacity of 6.7 million tonnes and thermal power plants of 280 megawatts. These assets are situated in the states of Madhya Pradesh, Uttar Pradesh and Chhattisgarh, according to an exchange filing.
"The acquisition will enable Dalmia to expand its footprint into the central region and will represent a significant step towards realization of its vision to emerge as a pan-India cement company with a capacity of 75 million tonnes by FY27 and 110‐130 million tonnes by FY31," it said.
In a separate filing, Jaiprakash Power Ventures Ltd. said it has entered into a binding framework agreement to sell its Jaypee Nigrie Cement Grinding Unit to Dalmia Cement (Bharat) Ltd. for Rs 250 crore. This unit has a capacity of 2 million tonnes per annum.
The cumulative amount of the transaction stands at Rs 5,916 crore for all the assets being transferred to Dalmia Bharat.
"Jaiprakash Associates has been taking steps to reduce its debt and repay to lenders and meet its commitments on pro active basis. In order to repay the loans of lenders and concentrate in its other core areas of working, Jaiprakash Associates has decided to divest from cement business completely," Manoj Gaur, executive chairman, said in a statement.
Shares of Dalmia Bharat Ltd. and Jaypee Group companies Jaiprakash Associates and Jaiprakash Power Ventures soared after the deal was announced.
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