UltraTech buys cement units of Jaiprakash Associates

 The board had approved the acquisition of cement business of Jaiprakash Associates Ltd. (JAL) situated in Bela and Sidhi in Madhya Pradesh, having a capacity of 4.9 mtpa together with 180 MW TPP.
UltraTech and JAL have entered into a definitive agreement for this acquisition which will propel the company’s cement capacity in India from 60 mtpa to 65 mtpa. With its current projects underway, the capacity in India will stand raised to 71 mtpa in 2016.
UltraTech will issue non-convertible debentures worth Rs. 4,538 crore and non-convertible cumulative redeemable preference shares worth Rs. 10 lakh. As part of the business, the company will take over Rs. 626.50 crore of debt and negative working capital of Rs. 160.50 crore.
The transaction with JAL is subject to the approval of shareholders and creditors, sanction of the Scheme of Arrangement by the High Courts, approval of the Competition Commission of India and other statutory approvals. It is anticipated that the transaction will close in 7 to 9 months.
Standard Chartered Bank and Moelis & Company India Pvt. Ltd. are the transaction advisors and the valuation was carried out by Bansi S. Mehta & Co., Chartered Accountants. J. M. Financial Institutional Securities Ltd. provided the independent fairness opinion to the company. Amarchand & Mangaldas & Suresh A. Shroff & Co. is the legal advisor.

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