Jaiprakash Associates to sell stake in Bhilai Jaypee cement

Jaiprakash Associates has decided to sell its entire 74 per cent stake in Bhilai Jaypee Cement to Orient Cement for INR14,500m (US$226.6m), while raising another up to INR20,000m by issuing securities.

The transaction is expected to be completed by 2017-end, the company said in a notice to shareholders for AGM to be held on 23 September 2017. The company aims to reduce its debt and fulfill its working capital requirements with this action.

Bhilai Jaypee Cement owns a 1.1Mta clinker plant at Babupur, Satna, in Madhya Pradesh, and a 2.2Mta cement grinding unit at Bhilai, Chhattisgarh.

The debt-ridden company, along with its subsidiary, Jaypee Cement Corporation, recently sold a substantial portion of its cement business with an aggregate capacity of 17.2Mta to Aditya Birla Group company UltraTech Cement for around INR161,890m.

The company said this move has resulted in reduction of debt of about INR140,000m.