Jaiprakash Associates said it received approval from its committee of directors to close the transaction for selling part of its cement business to UltraTech Cement for INR161.89bn.
The deal will see the cement plants in Uttar Pradesh, Madhya Pradesh, Himachal Pradesh, Uttarakhand and Andhra Pradesh move to UltraTech. An addition unit, currently under construction in Uttar Pradesh, will become part of UltraTech for an additional INR4.7bn.
The proceeds of this transaction will help the company to reduce its debt, including repayment of its loans to bankers, part payment to the holders of foreign currency convertible bonds, repayment of all outstanding fixed deposits and other priority payments.
The sale enables Jaiprakash Associates and Jaypee Cement Corp to transfer their debt from a stressed account to a AAA-rated company, according to ICICI Bank. "This is the largest asset resolution in the country so far, and I hope that this landmark transaction will pave the way for more such resolutions. It is also heartening to note that this is the largest transaction in India's cement industry, thus far," the bank’s MD & CEO, Chanda Kochlar, said in a statement.
