The CK Birla Group-owned Orient Cement on Thursday said its board had approved the acquisition of 74 per cent stake in Bhilai Jaypee Cement Limited (BJCL) and the Nigrie cement grinding unit for a total of Rs 1,950 crore.
While the BJCL stake will be acquired from Jaiprakash Associates Limited (JAL), the Nigrie cement grinding unit would be bought from Jaiprakash Power Ventures Limited (JPVL).
"...considered and accorded its consent to acquire 28,09,66,000 equity shares of Bhilai Jaypee Cement Limited (consisting 74 per cent of the total equity share capital) from Jaiprakash Associates Limited (JAL) and 752 equity shares of BJCL from the nominee of JAL, for a total enterprise value of Rs 1,450 crore," a company filing said.
The acquisition will provide the company with high quality assets and take its total capacity from 8 mtpa (million tonnes per annum) to 10.2 mtpa and provide entry into the high-growth central and eastern regions.
"It will also benefit from the BJCL's access to limestone reserves and other raw material, including slag," the company statement said.
"The demerger of Orient Cement from Orient Paper and Industries Limited was envisioned to create a pure-play cement company which could grow fast. After establishing the company, we proudly commissioned our greenfield plant at Gulbarga last year, increasing our capacity by 60 per cent to 8 mtpa.
"The current proposal to acquire BJCL from JAL is a significant step towards accomplishing our current mission of reaching a capacity of 15 mtpa by 2020," said company Chairman C.K. Birla.
The acquisition of the Nigrie unit will also provide it with a high quality asset at a strategically well located region.
Nigrie cement grinding unit at Singrauli in Madhya Pradesh with a capacity of 2 mtpa is located close to the end markets in Bihar, Jharkhand and eastern Uttar Pradesh.
"Nigrie grinding unit is good fit for our expansion and market-diversification strategy. Its close proximity to the growing markets, and the availability of power, fly-ash and the infrastructure of the adjoining super thermal power plant of JPVL provides us an opportunity to reach these markets very efficiently," said company's MD and CEO Deepak Khetrapal.
--IANS
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