Mumbai, March 24: Jaiprakash Associates today decided to sell its 74 per cent stake in Bokaro Jaypee Cement to Dalmia Cement (Bharat) for Rs 690 crore.
The deal will help Jaiprakash to trim its debt.
Bokaro Jaypee, a 74:26 joint venture between Jaiprakash Associates and steel maker SAIL, owns a 2.1-million-tonne cement plant at Bokaro in Jharkhand.
“The board of Jaiprakash Associates has approved the share purchase agreement with Dalmia Cement (Bharat) Ltd for the sale of a 74 per cent stake in the paid-up equity share capital of Bokaro Jaypee Cement to Dalmia Cement (Bharat) Ltd,” the company informed stock exchanges after market hours.
Jaiprakash Associates added that the consideration for the transaction worked out to around Rs 69.74 per share against its cost of Rs 18.57 apiece. The deal will, thus, result in Jaiprakash clocking capital gains of around Rs 507 crore from the transaction.
Earlier in the day, the company, in a separate filing, had said a meeting of its board would be held to consider stake sales in joint venture subsidiaries.
The company has another cement joint venture with SAIL in Bhilai, which has a capacity of 2.2 million tonnes.
Ahead of the announcement, there was speculation that Jaiprakash Associates will sell its stake in both these ventures. It is learnt that the company will take a decision on selling its stake in the second joint venture later.
Last year, Jaypee Group had sold its 4.8-million-tonne cement plant to Aditya Birla Group’s UltraTech Cement Company.
It is also in talks to sell its two hydropower projects in Himachal Pradesh to bring down the debt levels.
While Jaypee Group is the third-largest cement producer in the country, according to its website, Dalmia Cement (Bharat) has a capacity of 17 million tonnes.
Holcim-controlled ACC was also one of the contenders for buying JP Associates’ stake.
“The above stake sale is subject to the approval of SAIL and such other approvals, as may be necessary from lenders of Bokaro Jaypee Cement and concerned authorities,” Jaiprakash Associates added.
Ahead of the announcement, shares of the company ended nearly 1.34 per cent higher at Rs 49.
For the third quarter ended December 2013, JP Associates reported a net loss of Rs 88.71 crore against a net profit of Rs 67.67 crore in the year-ago period.