JP Associates to sell 4.8 MTPA Gujarat Cement Plant

Jaypee Group has reached an agreement to sell its 4.8 MTPA Gujarat Cement Plant, a unit of Jaypee Cement Corporation (JCCL) which is a 100 % owned subsidiary of Jaiprakash Associates (JP Associates) to Ultra Tech Cement. The enterprise value of the deal is Rs 3,800 crore besides the actual net working capital. Gujarat Cement Project consists of an Integrated Cement Plant at Kutch & a 2.4 MTPA Cement Grinding Unit at Wanakbori.

Over the past decade, JP Associates had increased its cement capacity from 4.40 MT in 2002 to 36.8 MT, and post this deal will continue to remain the 3rd largest cement manufacturer in the country.

The proposed transaction is subject to the approval of shareholders and creditors, sanction of the Scheme of Arrangement by the High Courts, approval of the Competition Commission of India and all other statutory approvals. The company anticipates the transaction to close in 7 to 9 months.

Standard Chartered assisted JP Associates as Transaction Advisors while Bansi S Mehta & Company as Valuation Advisors. Vaish Associates were legal advisors and Sobhagya Capital Options as Merchant Bankers.