"The deal has been finalized. Ultratech will buy Jaypee Cement Corporation's 51 percent stake in Gujarat plant, which has an annual capacity of five million tonnes for close to Rs 4,000 crore" a Jaypee Group official said. (Agencies)
The Jaypee Group, having interests in areas such as real estate, cement and hospitality, is the country's third largest cement maker with an installed capacity of 33.5 mtpa.
Though Jaiprakash Associates, the flagship company of the Group, holds the majority of the cement business, however, operations in Gujarat and Andhra Pradesh having a total capacity of 9.8 mtpa, are under the aegis of Jaypee Cement Corporation. This was hived off for monetizing the asset.
Aditya Birla Group, the country's largest cement maker with 54 mtpa capacity, runs cement business through Ultratech Cement and plans to increase its capacity by another 10 mtpa by 2015. The two were engaged in negotiations for a little over a year now.
Apart from Ultratech Cement, there were other contenders including French building material major Lafarge, for the acquisition of the unit. However, a previous transaction between the two in the acquisition of Bina Power Supply (BPSL) in 2008 also helped the deal. A group company of Jaiprakash Associates had acquired BPSL from the Aditya Birla Group.
Jaypee Cement Corporation wanted to sell Gujarat asset for raising some funds and had been mulling various options, including offloading to a private equity firm. The proceeds would be used to meet the capacity expansion and retire debt, among others things, it had said earlier.
Jaypee Group is working on increasing its cement capacity to 36 mtpa by the end of the current fiscal and is evaluating various locations to take it to 50 mtpa capacity over the next five years.
"The deal has been finalized. Ultratech will buy Jaypee Cement Corporation's 51 percent stake in Gujarat plant, which has an annual capacity of five million tonnes for close to Rs 4,000 crore" a Jaypee Group official said.