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Cement maker Dalmia Cement (Bharat) has bought Jaiprakash Associates’ 74 per cent stake in Bokaro Jaypee Cement for ₹690 crore.
Bokaro Jaypee, in Jharkhand, is a joint venture between Jaiprakash Associates and State-owned steelmaker Steel Authority of India Ltd (SAIL).
Boost for Dalmia While sources associated with the development remained noncommittal on what turned the deal in favour of Dalmia Cement, which pipped close contender ACC, experts say this acquisition will give Dalmia an opportunity to strengthen and consolidate its position in the eastern India market.
For the debt-ridden Jaypee Group, the deal follows the recent sale of two hydro-power projects in Himachal Pradesh for ₹10,500 crore to Abu Dhabi’s National Energy Company. In 2013, it sold its 4.8 million tonnes per annum capacity cement plant to Aditya Birla Group’s UltraTech Cement.
Paring debts Jaiprakash Associates has been looking for an investor to sell stakes in its ventures in order to ease its ₹60,000 crore debt burden. The company is still looking for an investor for its Bhilai joint venture with SAIL. The two (Bokaro and Bhilai) joint ventures have a total capacity of about 4 million tonnes.
Ernst & Young was the financial advisor to Jaypee in the latest deal.
Under the joint venture agreement, SAIL will continue to hold a 26 per cent stake and supply slag, used as a raw material in making cement, for 30 years.
This deal is one of the biggest transactions in the sector in the recent past.
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