Reliance ADA Group company Reliance Infrastructure is expected to get final bids from the shortlisted bidders for the sale of its cement business by December 24, for a deal that could be valued at over R5,000 crore, according to sources close to the sale process.
RInfra, in November announced that it has put its cement and roads business on the block as it is now going to focus on its defence business. The company had signed an agreement in March 2015 with Pipavav Defence & Offshore Engineering Co to acquire the company in an all cash deal.
According to sources, there are seven bidders interested in acquiring the cement business, which include leading private equity players like Blackstone, Carlyle, Baring and CRC of China, and major cement companies like JK Lakshmi, JSW Cement and Birla Corp. The lead bankers for the sale process are Morgan Stanley and SBI.
“Due diligence process is over and the binding bids should come in by December 24,” said a person with knowledge of the developments.
The cement capacity of Reliance Infrastructure is pegged at 5.6 MTPA.
MS Mehta, CEO, Reliance Infrastructure recently said that the company is hoping to close the sale of cement and road businesses by March 2016. He said that the company has already begun the process of due diligence on both the businesses and is epxecting to get valuations in line with the last few transactions in the cement space.
The proceeds from the sale of these assets will be primarily utilised by RInfra for completion of Pipavav Defence acquisition and retiring of debt.