Aditya Birla nears $1-bn stake purchase of Jaiprakash Associates cement business: report
26 Jun 2012
The $40 billion Aditya Birla Group has emerged as the front-runner for acquiring a stake worth around Rs5,700 crore ($1 billion) in the cement business of Jaiprakash Associates (JAL), the Mint today reported, citing three people familiar with the matter.
The person told the paper that apart from a multinational, there were no other serious bidders for a part stake in JAL's cement business, which could be worth as much as $1 billion.
The Economic Times had early this month said that JAL is in talks with Lafarge SA of France, Ambuja Cements, the Aditya Birla Group and Switzerland-based Holcim Ltd, which owns ACC Ltd for selling a 26 per cent stake in its cements business that includes its plants in Gujarat and Andhra Pradesh.
JAL is India's third-largest cement company having produced 15.87 million tonnes in fiscal 2011.
In order to facilitate the sale, JAL has already spun off its two cement units in to a separate company, Jaypee Cement.
Noida, Uttar Pradesh-based JAL, the flagship company of the Jaypee Group, currently has debt of Rs43,900 crore, mainly accrued from expanding capacity at cement plants and investment in real estate and infrastructure projects.
It posted profits of Rs 947 crore for the year ended March 2012 – a decline of 54 per cent from year earlier. The company's stock has fallen by 18.5 per cent since the past one year, although the Sensex fell of 8.9 per cent.
