JP Associates in talks to sell cement biz to ACC
Jai prakash Associates NSE -3.72 % is in advanced talks with Lafarge Holcim-controlled ACC Limited to sell its residual cement business with an installed capacity of about 5.5 million tonnes per annum for Rs 5,200 crore.
The transaction is expected to be completed in the second quarter of the fiscal. “The company is divesting its entire residual cement asset to become a debt free company and also to infuse fund in its cash-crunched subsidiary Jaypee Infratech Limited, the listed real estate arm of the company,” said a person involved in the transaction. Jaypee has entered into an exclusivity agreement with ACC till July 31.
Jaiprakash Associates, which houses the group’s cement business, is raising Rs 2,200 crore from Deutsche Bank as bridge loan against the sale of cement assets. About Rs 1,000 crore of the proceeds from the bridge loan will be used for Jaypee Infratech after getting lenders and court approval. The balance will be used to repay its own term loan.