Jaiprakash Associates to sell 74% in Bokaro cement unit to Dalmia Cement for around Rs 1,200 crore

MUMBAI: Infrastructure conglomerate Jaiprakash Associates signed an agreement to sell its 74 per cent stake in a cement manufacturing unit in Bokaro to Dalmia Cement (Bharat) for a deal that values the entity at around Rs1,150 crore. The proceeds of the stake sale will help Jaiprakash Associates in its plan to cut the Rs60,000 crore debt on its books. It wants to slash debt by Rs15,000 crore by March end.

In a disclosure to bourses, Jaiprakash said it will sell its entire holding of 74 per cent in the Bokaro unit, of which Steel Authority of India owns 24 per cent, at Rs69.74 per share, which translates to about Rs690 crore for the stake.

“The above stake sale is subject to the approval of SAIL and such other approvals, as may be necessary from lenders of Bokaro Jaypee Cement and concerned authorities,” Jaiprakash Associates said. Besides the equity investment, Dalmia Cement will also take over around Rs250 crore of debt attached to Bokaro Jaypee Cement, an executive associated with the deal said.


Jaiprakash Associates has been on the lookout for buyers for hydropower, realty and cement projects. This is the second big sale announced by Jaiprakash Associates this month after it said early March that it had signed a pact to sell two hydropower projects to Abu Dhabi National Energy Company (Taqa) for an enterprise valuation of Rs10,500 crore. That will in effect be the largest foreign direct investment (FDI) in the battered Indian power sector in recent times.

“Jaiprakash Associates’ balance sheet has been so stretched due to the huge debt that it needs to sell assets to reduce the stress and survive. Most infrastructure companies are looking at asset sales for reducing debt and the good news for Jaiprakash Associates is that they have been able to seal a few deals and move closer to their target of fund raising,” said Gaurav Dua, head of research at brokerage Sharekhan.

Two other analysts said Jaiprakash may miss its target of cutting debt by Rs15,000 crore by March but that it is sticking to its strategy and has been successful in sealing deals.