Orient Cement has agreed to acquire Jaiprakash Associates’ (JAL) 74% stake in Bhilai Jaypee Cement (BJCL) for an Enterprise Value of Rs 1,450 crore. The Enterprise Value is on a cash-free, debt-free basis and is subject to adjustments on account of working capital, if any. The transaction will be funded by Orient Cement through a mix of internal accruals, debt and equity funding. Moelis & Company is the financial advisor, while Cyril Amarchand Mangaldas is the legal counsel to Orient Cement for this transaction.
BJCL is a joint venture between JAL and Steel Authority of India (SAIL) and has an integrated PSC cement capacity of 2.2mtpa consisting of a clinkerisation unit in Satna area in Madhya Pradesh and a grinding unit in Bhilai, Chhattisgarh. The acquisition is subject to satisfactory negotiation and execution of definitive agreements, requisite approvals from SAIL, the Competition Commission of India and other relevant regulatory and third party approvals.
The acquisition will provide Orient Cement with high quality assets taking its total capacity from 8.0mtpa to 10.2mtpa, and provide entry into the high growth central and eastern regions. Orient Cement will also benefit from BJCL’s access to limestone reserves and other raw materials including slag.
| Company Name | CMP |
|---|---|
| Ultratech Cement | 11887.30 |
| Ambuja Cement | 458.95 |
| ACC | 1431.85 |
| Shree Cement | 25301.95 |
| Dalmia Bharat | 1972.55 |
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