Shares of Jaiprakash Associates surged as much as 17.67 per cent on Friday after the company announced part sale of its cement business to the Kumaramangalam Birla-led UltraTech for Rs 15,900 crore, marking the biggest consolidation in the cement sector.
At 12.04 pm, shares of debt-ridden Jaiprakash Associates were trading 11.78 per cent up at Rs 8.54. The scrip opened at Rs 7.96 and has touched a high and low of Rs 8.99 and Rs 7.80, respectively, in trade so far.
Later, the scrip closed 11.65 per cent up at Rs 8.53.
In a filing to the BSE, Jaiprakash Associates said, said, “Board approved the definitive agreement with UltraTech Cement for sale of part of its cement business comprising identified operating cement plants with an aggregate capacity of 17.2 MTPA spread over the states of UP, MP, HP, Uttarakhand and Andhra Pradesh, besides a grinding unit of 4 MTPA capacity, which is currently under implementation in UP.”
Both the parties have mutually agreed to exclude Shahabad plant in Karnataka from the transaction, it added.
The total enterprise value is Rs 15,900 crore. An additional amount of Rs 470 crore shall be paid by UltraTech Cement for completion of the grinding unit under implementation.
According to Angel Broking, while the deal will take UltraTech’s cement capacity to over 91 mtpa from the present 68 mtpa, it will help Jaypee group reduce its debt. Post the deal, Jaypee will continue to have 10.6 mtpa of cement capacity.