Jobaaj Stories
Cement-to-Sugar conglomerate Dalmia Group has announced the acquisition of the cement, clinker, and power plants of distressed Jaypee Group for a consideration of Rs 5,666 crores.
Dalmia Group is one of the oldest conglomerates in India. It was founded by Shri Jaidayal Dalmia in 1939. Today, the group is a leading player in sectors like Cement, Refractories, and Sugar.
Jaiprakash Associates Ltd., the flagship company of the Jaypee Group, has been under debt for a long time. In March 2022, the firm defaulted on repayment of Rs 2,897 crores to its lenders. A total of 35 banks had exposure to the distressed company as it had a total outstanding debt of over Rs 27,000 crores!
The company was taken to Allahabad NCLT by SBI in September 2022 for initiation of insolvency proceedings. The bank alleged consistent defaults with irregular payments against the company. Late in October, the company announced that it would be divesting all its cement assets in a bid to reduce debt, marking a complete exit from the Cement industry.
By entering into this binding agreement, the company has finally put to rest all the rumors associated with the cement arm. At one point, Adani cement was rumored to have been in talks for acquiring the same.
The assets set to be acquired include a cement manufacturing capacity of 9.4 million tonnes, a clinker capacity of 6.7 million tonnes, and thermal power plants of 280 megawatts. After the acquisition, the cement assets of the Dalmia Group will jump to 45.3 million tonnes, getting it close to Shree Cements, the third-largest cement manufacturer in India.
Moreover, this acquisition will help the company become a pan-India brand and assist the company in achieving its aim of reaching 75 MTPA by FY27 & 110 MTPA by FY31.
Shares of Dalmia Bharat trade around Rs 1,892.75 per share while that of Jaiprakash Associates currently trades around Rs 10.90 per share.
Article by Aman Agarwal.
