Jaypee Group on Monday raised the sale value of 21.2 million tonne per annum (MTPA) cement assets to Aditya Birla Group firm UltraTech Cement to Rs 16,189 crore. Cheering the news, stocks of Jaiprakash Associates jumped 38 per cent in morning trade on Tuesday. Earlier in March this year, Jaypee Group had announced part sale of its cement business in five states and a grinding unit in Uttar Pradesh to Kumarmangalam Birla-led Ultratech for Rs 15,900 crore. Jaypee Group’s another firm Jaiprakash Power Ventures also surged over 10 per cent after the announcement in the morning deals.
Below are 5 things to know about the deal
1. About Rs 12,000 crore worth of debt to be transferred to Ultratech Cement
2. Don’t think lenders will invoke SDR after the UltraTech deal, said Rahul Kumar, Director and CFO, Jaiprakash Associates to a business channel
3. Total debt of company is at Rs 28,000 cr and subsidiaries have Rs 2,000 cr debt. The company expects the debt to come down at Rs 16,000 crore levels after the Ultratech Cement deal
4. Ultratech Cement has also agreed to pay an additional amount of Rs 470 crore for completion of 4 million tonne per annum (MTPA) grinding unit in Uttar Pradesh.
5. Jaiprakash Associates owes over Rs 30,000 crore to a consortium of lenders led by ICICI Bank and the sale of its 21.2-million tonne cement business is very crucial for the promoters (the Gaur family) to continue in business.
Sanjeev Bhasin of ILFS told to CNBC TV18 that, “UltraTech Cement has got a golden deal at $122 per tonne and it is a win win situation for the company.” The brokearge house keeps ‘HOLD’ rating on the Jaiprakash Associates among penny stocks.
Stocks of UltraTech Cement were trading 0.31 per cent down at Rs 3400.10 at 10.56 am.
