UltraTech Cement, an Aditya Birla Group Company, has acquired the 4.8-million tonne per annum Gujarat unit of Jaypee Cement Corporation, for Rs.38 billion. As part of the deal, UltraTech will take over debt of Rs.36.5 billion. It will issue equity worth Rs.1.5 billion, with the fresh issue resulting in dilution of no more than 0.32% of its capital. The deal is expected to be closed in eight-nine months. The Gujarat unit of Jaypee Cement has a 57-MW coal-based power plant with a 30-MW DG (diesel generator) back-up, limestone reserves sufficient to run the plant at current capacity for 90 years and a captive jetty at Sewagram. The valuation of the plant works out to $124 a tonne with the rupee valued at 64 against the dollar. For Jaypee Associates, this may be only the first of the moves to prune the Rs.600 billion debt it carried on its books as of March this year. “With this acquisition of 4.8 million tonnes per annum, the company’s current capacity increases to 59 million tonnes per annum. With projects underway it will stand raised to 70 million tonnes by 2015,” UltraTech Cement Chairman Kumar Mangalam Birla said. With new expansion plans in Karnataka, Rajasthan and Madhya Pradesh set to go on stream by 2015, UltraTech’s capacity is expected to touch 70 mtpa. UltraTech will also benefit from the Rs.3.5-3.8 billion unrealised depreciation and tax set-off against the losses incurred by Jaypee Cement.
