The Jaypee Group is in talks with HeidelbergCement and JSW Cement, to form a joint venture which will control the majority of its cement plants as part of an ongoing exercise to reduce debt, the Economic Times of India reports.

The plan envisages a separate joint venture entity which will house around 20-22Mta of Jaypee’s operational units spread across Uttar Pradesh, Himachal, Uttarakhand, Andhra Pradesh, Chattisgarh and a new greenfield unit in Karnataka, which is expected to come on-stream this year, said multiple sources in the know. Jaypee is open to becoming a junior partner in the proposed venture with a 49 per cent shareholding but may even be reduced to 40 per cent thereby ceding management control and a majority stake.

The rationale behind the exercise, said the people cited above, is to significantly bring down Jaypee’s consolidated group net debt in one shot. For both Heidelberg and JSW – still largely regional players – the proposed deal gives an opportunity to ramp up their footprint nationally.