Adani Group, controlled by billionaire Gautam Adani, is in advanced talks with debt-laden Jaiprakash Power Ventures Ltd to buy a cement unit, people familiar with the matter said.
The ports-to-power conglomerate could pay about 50 billion rupees ($606 million) for the cement grinding unit and other smaller assets, said one of the people, who asked not to be identified because the information is private.
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The deal will be made by the recently acquired cement unit of one of Asia’s richest men, the people said, adding that an announcement was expected as early as this week. As the talks progressed, they could be delayed or broken off, the people said.
The deal will help strengthen Adani Group’s sudden dominance in the cement sector, which began after it bought Switzerland’s Holcim Ltd in May. Ambuja Cements Ltd and ACC Ltd, making it India’s second largest cement producer almost overnight with a plant set up in production. the capacity is 67.5 million tons per year.
Adani Group representatives declined to comment. Representatives from Jaiprakash Associates were not immediately available for comment.
The cement mill has a capacity of 2 million tons per year. It began operations in October 2014 in the city of Nigrie in the central Indian state of Madhya Pradesh.
The board of Jaiprakash Associates has decided to divest the company’s “significant” cement business to reduce debt, according to a stock exchange filing on Monday. Separately, Jaiprakash Power Ventures said its board plans to sell the Nigrie cement grinding unit as well as other non-cement grinding units.
Adani Group last month said it will expand its cement production capacity to 140 million tonnes in five years and plans to inject 200 billion rupees into its recently acquired cement business.
Source:Bloomberg
