Jaiprakash Associates to sell Bhilai Jaypee Cement for Rs 1,450 crore
Jaiprakash Associates has decided to sell its entire 74% stake in Bhilai Jaypee Cement to Orient Cement for Rs 1,450 crore, while raising another up to Rs 2,000 crore by issuing securities, in order to reduce its debt and fulfill the working capital requirements.
The stake sale is expected to be completed by 2017-end, the company said in a notice to shareholders for AGM to be held on September 23 on Thursday.
Bhilai Jaypee Cement owns 1.1-million tons per annum (MTPA) clinker plant at Babupur, Satna, in Madhya Pradesh and a 2.2-MTPA cement Grinding Unit at Bhilai, Chhattisgarh. The company said this move has resulted in reduction of debt of about Rs 14,000 crore.
Jaiprakash Associates has also sought shareholders nod to raise nearly Rs 2,000 crore through issue of qualified institutions placements/GDRS/ADRS/follow-on public offer/rights issue/preferential issue, etc.
It has informed that the joint lenders forum (JLF) on June 22 has finalised a debt realignment plan (DRP), wherein a part of the total debt would be retained in the company and the residual debt would be transferred along with land and certain other assets as part of a real estate undertaking to a special purpose vehicle.
The company is focusing on its core area of strength of engineering and construction and is bidding for various construction projects. “Further, steps are being taken to strengthen marketing network, strategies for marketing products in cement and real estate space,” it said.