Dalmia Bharat to acquire cement, power plants of Jaiprakash Associates for ₹5,666 crore enterprise value

• The acquisition will include a total cement capacity of 9.4 million tonnes (along with a clinker capacity of 6.7 million tonnes and thermal power plants of 280 MW).
• These plants are situated in Madhya Pradesh, Uttar Pradesh, and Chhattisgarh.
• Jaiprakash Associates has been in the process of selling its cement assets in order to reduce its debt levels and repay lenders.

Dalmia Bharat’s subsidiary Dalmia Cement on Monday said it plans to acquire the cement, clinker and power plants of Jaiprakash Associates for a total enterprise value of ₹5,666 crore, as it looks to expand its domestic presence. This deal is part of Jaiprakash Associates’ efforts to pay off its lenders by selling its assets.

The acquisition will include a total cement capacity of 9.4 million tonnes (along with a clinker capacity of 6.7 million tonnes and thermal power plants of 280 MW). These plants are situated in Madhya Pradesh, Uttar Pradesh, and Chhattisgarh.

With this, Dalmia Bharat will expand its footprint into the central region and will help it move closer to its goal of becoming a pan-India cement company with a capacity of 75 million tonnes by FY27 and 110‐130 million tonnes by FY31.

Jaiprakash Associates has been in the process of selling its cement assets in order to reduce its debt levels and repay lenders. Between 2014 and 2017, the company sold cement capacity of 20 million tonnes per annum (MTPA) to UltraTech Cement.

“Jaiprakash Associates ltd. (JAL), the flagship company has been taking steps to reduce its debt and repay to lenders and meet its commitments on pro active basis. In this regard, JAL had divested more than 20 MTPA cement capacity in favour of Ms. UltraTech Cement Limited during 2014 and 2017, while selling its controlling stake of more than 2 MTPA cement capacity to Dalmia Group in 2015,” said Jaiprakash Associates in a BSE Statement.

According to several media reports, Adani Group and Aditya Birla Group both were in the fray to acquire the assets.

“In order to repay the loans of lenders and concentrate in its other core areas of working, JAL has decided to divest from (the) cement business completely. With the sale of cement capacity of 9.4 MTPA in favour of Dalmia Cement (Bharat) ltd. (DCBL), we hope and pray having demonstrated its creditable working, JAL will further 'cement' its credentials of being a trustworthy organisation in (the) infrastructure segment of the country in times to come" said Jaiprakash Associates in a Statement.

In May this year, the billionaire Gautam Adani paid as much as $10.5 billion to buy Ambuja Cements and ACC from Switzerland-based Holcim.

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