Jaiprakash Associates shares up 2% on plans to sell cement units in Himachal

NEW DELHI: Jaiprakash Associates Ltd surged as much as 2.4 per cent in morning trade on Thursday, after the Jaypee Group shortlisted its two cement units in Himachal Pradesh to be put on the block.

At 09:45 a.m.; Jaiprakash Associates was trading 2.41 per cent higher at Rs 38.20. It hit a high of Rs 38.35 and a low of Rs 37.80 in trade today.

"It has already initiated dialogues with their potential suitors, said multiple sources involved. These asset sales are aimed to further trim its group debt from the already stretched balance sheet," ET reported.

Jaiprakash is the third-largest cement player in the country with a 27.8 million tonnes per annum capacity. Its Himachal units include a 2 million tonnes cement plant and another 2 million tonnes grinding unit, both in the Solan district.

Jaypee Himachal Cement Grinding & Blending Plant was commissioned in 2010 and enjoys excise benefits. As reported by ET in its September 9 edition, the group's power arm Jaiprakash Power Ventures is also in advance negotiations to sell two of its hydro projects in the state for $2 billion to Abu Dhabi utility company TAQA.

The cash-strapped diversified infrastructure conglomerate is in the process of paring its consolidated group debt, which has ballooned to Rs 64,000 crore as per recent estimates by foreign brokerage firm Credit Suisse.

As per Bloomberg calculations, Jaiprakash Associates is the second most leveraged Asian construction materials company after China National Building Material Co, said the ET report.

The group, on its part, says the current debt is 56,000 crore with JAL - the construction, cement and engineering arm - being the most indebted at Rs 23,000 crore

Earlier this month, Ultratech finally agreed to buy JAL's Gujarat plants for an enterprise value of Rs 3,800 crore. This helped JAL - which has also built India's only Formula One race track - cut its liabilities by 15 per cent.