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JSW Cement Ltd, part of Sajjan Jindal’s $11-billion JSW Group, is looking at various avenues for organic and inorganic growth.
The company has partnered with an unnamed global private equity (PE) player to bid for the debt-laden Binani Cement.
Binani Cement has a production capacity of about 11 million tonnes (mt), of which nearly 6 mt is in India. It has secured and unsecured debt to the tune of around ₹4,500 crore.
“There are a lot of bidders and this is going to get aggressive because nobody wants to leave these assets,” Parth Jindal, MD of JSW Cement, told newspersons at a press conference here recently. The PE firm is likely to hold a majority stake in the proposed entity, he added.
Binani Cement bidIf its bid is successful, JSW Cement will not look at consolidating Binani Cement into its books immediately. “All these NCLT (National Company Law Tribunal) cases take two-three years to turn around. So we are partnering with a PE firm and bidding for them. The idea is not to consolidate those into our books immediately but wait for it to turn around,” he said.
Binani Cement, Jindal said, has a 3 mt plant in China and a 2 mt grinding unit in Dubai. “We have a limestone deposit in Fujairah in the UAE and a clinker unit. If Binani comes to us, the Fujairah unit can be integrated with Binani’s Dubai one,” he said.
JSW, however, is still in the process of evaluating Binani’s China unit, on whether to keep it or hive it off.
This apart, JSW Cement will also bid for Bihar-based Kalyanpur Cements Ltd, which has been referred to the NCLT for resolution. The company has an annual capacity of 1 mt.
Brownfield expansionJSW Cement is looking to increase the production capacity in West Bengal to 3.6 mt per annum, from the current 2.4 mt, at an estimated investment of ₹300 crore. The company has already invested close to ₹800 crore in a 2.4 mt grinding plant at Salboni.
It will also invest close to ₹100 crore to set up a 18 MW captive power plant.
The company plans to ramp up its total capacity to 20 mt by 2020, when it plans an IPO.
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