Jaiprakash Associates (JAL) has received an approval for disinvestment of its two cement units to UltraTech Cement. The board of directors at their meeting held on December 23, 2014 has approved for the same. The company will sell its integrated cement plant with clinker capacity of 2.1 MTPA and cement grinding capacity of 2.6 MTPA at Bela, Madhya Pradesh along with CPP of 25 MW and its integrated cement plant with clinker capacity of 3.1 MTPA and cement grinding capacity of 2.3 MTPA at Sidhi, MP along with CPP capacity of 155 MW.
The board has approved the Memorandum of Understanding setting out the broad terms and conditions of the proposed acquisition. The Enterprise Value of this acquisition has been agreed at Rs 5,400 crore. The transaction is subject to customary due diligence, definitive agreements and regulatory approvals as may be required.
This disinvestment is in line with the Jaypee Group’s publicly announced policy of bringing down JAL’s debt and improving its balance sheet. Axis Capital was the transaction advisor in this process.