Construction Industry News
According to an earlier announcement, Dalmia Bharat has entered into definitive agreements with debt-ridden Jaiprakash Associates (JAL) to acquire the latter's cement assets. Dalmia Cement (Bharat) Limited (DCBL), a subsidiary of Dalmia Bharat, signed definitive agreements with JAL to acquire the JP Super Cement Plant in Uttar Pradesh for Rs 1,500 crore plus costs and expenses up to Rs 190 crore.
According to a regulatory update from Dalmia Bharat Ltd (DBL), this will be subject to various approvals and approvals regarding the JP Super plant and mines. In addition, it is contingent on "meeting certain precedent conditions, including the final outcome of the ongoing arbitration between JAL and Ultratech Cement. On 12 December 2022, DBL had announced that it will acquire cement assets of Jaypee Group's flagship company JAL and its associated company at an enterprise value of Rs 5,666 crore.
In addition, DCBL has executed a share purchase agreement for the acquisition of 74% of Bhilai Jaypee Cement (BJCL) at an enterprise value of Rs 666 crore. "DCBL has also signed a long-term lease (with a term of seven years) with Jaiprakash Power Ventures Ltd for its Nigrie Cement Grinding Unit of 2 million MTPA (Nigrie Unit)," it said.
DCBL has the option to purchase the Nigrie Unit at any time during the lease period for Rs 250 crore, according to DBL. DCBL announced in December that it had signed a "binding framework agreement for the acquisition of clinker, cement and power plants from JAL and its affiliate." The transaction includes a total cement capacity of 9.4 million tonnes per year (MTPA), a clinker capacity of 6.7 MTPA and two thermal power plants of 280 MW for a total enterprise value of Rs 5,666 crore. These assets are located in the Indian states of Madhya Pradesh, Uttar Pradesh and Chhattisgarh. In a similar application, JAL confirmed the developments, stating that it has "executed the necessary agreements with DCBL" for the sale of the Jaypee Super Cement Plant in Uttar Pradesh for Rs 1,500 crore.
It has also entered into a share purchase agreement with DCBL for the acquisition of 74% of BJCL for a total enterprise value of Rs 666 crore. "This agreement is subject to certain conditions precedent, including Jaypee Group's settlement with Assets Care & Reconstruction Enterprise Limited (ACRE) and SAIL's approval to take Dalmia Group as JV partner in place of Jaypee Group," the company stated.
According to JAL, this follows the signing of a binding framework agreement and definitive agreements by JAL and its associated company with DCBL regarding the divestment of certain cement, clinker and power plants for an enterprise value of Rs 5,666 crore, as part of the company's ongoing efforts to reduce its debt. The acquisition will help Dalmia expand its footprint in the central region.
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