Ultratech to acquire JP cement plants
UltraTech, the Aditya Birla Group firm announced that it would be acquiring the debt-ridden JP Group's cement plants for almost Rs.17,000 crore (approximately $2.5 billion), making it the biggest deal in the sector. The cement plants that are to be included in this deal are located in Madhya Pradesh, Uttar Pradesh, Himachal Pradesh, Uttarakhand, Andhra Pradesh and Karnataka.
Ultratech- India's cement giant
India's biggest cement company- UltraTech Cement Limited, based in Mumbai is a part of the Aditya Birla Group and is a division of Grasim Industries. It is also the largest exporter of cement clinker in India. It has a yearly capacity of 64 million tonnes. Its first plant- the Awarpur Cement Works Plant I began in the year 1983.
JP to sell cement plants to Ultratech
Aditya Birla's Ultratech, under a scheme of arrangement with Jaiprakash Associates, agreed to acquire the latter's cement plants at Bela and Sidhi in Madhya Pradesh. Other than the 2.1 MT clinker capacity and 2.6 MT grinding capacity at Bela, the deal included the 3.1 MT and 2.3 MT clinker and grinding capacity at Sidhi. It also included 2 power plants at Bela and Sidhi.
Bombay HC rejects JP-Ultratech deal
The Bombay High Court has rebuffed the scheme for the purchase of JP cement plants to Ultratech citing the new MMDR Act as the main reason. To deal with the transfer issue, JP Associates has decided to club the 2 cement plants in Madhya Pradesh into a bigger 22 MT cement package and then sell the shares of Jaiprakash Associates.
Mines and Mineral Development and Regulation (MMDR) 2015 Act
Under the new Mines and Mineral Development and Regulation (MMDR) 2015 Act, mine reserves that have not been purchased through an auction, cannot be transferred to another seller.
UltraTech shares soar 2-8% after the JP deal
UltraTech's shares made a 2-8% jump after the announcement of the Rs.16500 crores cement deal with JP Associates.
