UltraTech Jaiprakash Rs crore AdityaBirla UltraTech
"The deal is expected to be sealed before May," one of the two persons said. "The valuation and other critical aspects, such as the indemnity amount, are more or less finalised. We are waiting for one more approval," the second person said. The enterprise value includes debt of Rs 1,800 crore.
The sale of the cement units is aimed at reducing Jaypee's debt by Rs 8,000 crore. The group, which has interests in power, real estate and hospitality, had debt of Rs 45,000 crore as of December 2012.
A senior Jaypee official refused to confirm the deal. "I reserve my comments on the divestment of cement plants," said Manoj Gaur, executive chairman and CEO, Jaiprakash Associates.
Jaypee Group to Also Sell Land Parcels
"We have given a commitment to reduce our debt by Rs 8,000 crore by December this year, before embarking on any fresh capital expenditure," said Manoj Gaur, executive chairman and CEO, Jaiprakash Associates.
"We do not comment on market stories," said OP Puranmalka, wholetime director atUltraTech CementBSE -0.81 %. On Monday, Jaiprakash AssociatesBSE 2.79 % shares gained 1% to close at Rs 77 while UltraTech's stock slipped 2.5% to end at Rs 1,878.75 on the BSE.
"The management had indicated a debt reduction of Rs 6,000-6,500 crore by selling the cement plants in Gujarat for Rs 4,500 crore and the rest from (sale of) land parcels," ICICI Direct's analysts Deepak Purswani and Bhupendra Tiwary wrote in a research note on April 16.
The Jaypee Group also plans to raise Rs 1,000 crore by selling land parcels owned by subsidiary Jaiprakash Infratech.
Lenders to the group have reduced the rate of interest to 12.5% from 15%, and extended the loan tenure to 18 years from 10 years, giving a breather to the real estate developer. "We will reduce the debt of Jaiprakash Infratech to about Rs 4,000 crore by December, from Rs 7,000 crore now," Gaur said.