UltraTech, Jaypee revise cement deal to Rs. 16,200 crore.

UltraTech Cement, part of the Aditya Birla Group, on Monday agreed to buy Jaiprakash Associates’ 17.2 million tonnes per annum (mtpa) cement capacity for an enterprise value of Rs. 16,189 crore.

The deal was revised upwards from Rs. 15,900 crore that was agreed on March 31. This is the second revision to the deal price of Rs 16,500 crore for 18.4 mtpa capacity in February for plants in Uttar Pradesh, Madhya Pradesh, Himachal Pradesh, Uttarakhand and Andhra Pradesh and Karnataka.

The March deal revision had excluded the 1.2-million tonne plant in Karnataka.

An additional payment of Rs. 470 crore for 4 mtpa under construction grinding unit in Uttar Pradesh was included in the February agreement. The payment will be made once the construction is completed.

While the deal will take UltraTech’s cement capacity to 91 mtpa from the present 68 mtpa, it will help the Jaypee group reduce its debt. Jaiprakash Associates defaulted on bank loans, interest and statutory payments of Rs. 4,539 crore.

The company said this year that it failed to repay Rs. 2,905 crore in principal amount to banks and Rs. 1,558 crore in interest payments. UltraTech said in a statement, “The proposed transaction is essentially a geographic market expansion which will lead to UltraTech’s entry into growing markets of India.”


BS