The CK Birla group’s Orient Cement on Thursday said that it will acquire two cement assets of Japyee group for an enterprise value of R1,950 crore. In a filing to the exchanges, Orient Cement said that it has signed a definitive agreement to buy 74% stake in Bhilai Jaypee Cement Limited (BJCL) for an enterprise value of R1,450 crore and Nigrie Cement Grinding unit from Jaiprakash Power Ventures Limited for an enterprise value of R500 crore, respectively. BJCL is a Joint Venture between JAL and Steel Authority of India Limited (SAIL) and has an integrated
PSC cement capacity of 2.2mtpa consisting of a clinkerisation unit in Satna area in Madhya Pradesh and a grinding unit in Bhilai, Chhattisgarh. Nigrie unit in Singrauli area, Madhya Pradesh is a cement grinding unit with a capacity of 2.0mtpa and caters to markets in Bihar, Jharkhand and Eastern UP. Announcing the sale, the companies said both the acquisitions are subject to satisfactory negotiation and execution of definitive agreements, requisite approvals from SAIL, the Competition Commission of India and other relevant regulatory and third party approvals.
Orient Cement, which currently has 8 mtpa of cement manufacturing capacity across three units in the states of Telangana, Maharashtra and Karnataka said that it will fund the acquisition through a mix of internal accruals, debt and equity funding.
With the acquisitions, the company said that its total production capacity will rise to 10.2 mtpa and will give it access to central and eastern markets. In addition, the company said it will also benefit from BJCL’s access to limestone reserves and other raw materials including slag.