CRH, Dalmia seen among bidders for India's Jaiprakash cement business - sources

Heidelbergcement India

03/02/2016 11:45

By Anshuman Daga and Promit Mukherjee 
    SINGAPORE/MUMBAI, Feb 3 (Reuters) - Irish building materials 
group CRH  CRH.L  and India's Dalmia Cement are likely to submit 
separate bids next month for the cement business of Indian 
infrastructure builder Jaiprakash Associates  JAIA.NS , two 
sources with direct knowledge said. 
    The deal is likely to be worth about $3 billion, which is 
the total debt linked to the cement business, the sources told 
Reuters, adding binding bids were due next month. 
    Others possible bidders include the Indian unit of Germany's 
HeidelbergCement  HEIG.DE , India's top cement maker Ultratech 
Cement Ltd  ULTC.NS  and two private equity firms, one of the 
sources said. 
    The sources declined to be named as they were not authorised 
to speak to the media. A spokeswoman for Jaiprakash declined to 
comment. CRH, Dalmia, HeidelbergCement and Ultratech did not 
immediately respond to requests for comment. 
    Dalmia, which is among the top five cement manufacturers in 
India, met with Jaiprakash management last week and visited the 
company's plants in Madhya Pradesh, said a senior executive at 
Jaiprakash Associates. 
    The divestment of the cement business by Jaiprakash, whose 
other business interests include roads and residential property, 
is part of a strategy to reduce a debt burden that has been 
weighing on its balance sheet in the last few years. 
    Jaiprakash Associates' loss in the September quarter widened 
to 5.4 billion rupees, from a loss of 1.7 billion rupees in the 
year earlier period.  urn:newsml:reuters.com:*:nL3N13B1TO    
    The company's total debt was 612.9 billion rupees ($8.98 
billion) at the end of March. Jaiprakash's lenders will have a 
major say in the sale of the cement business, said the source. 
    In December 2014, Ultratech, part of India's Aditya Birla 
conglomerate, agreed to buy two of Jaiprakash's cement plants in 
the central state of Madhya Pradesh for 54 billion rupees 
($792.34 million), including debt.  urn:newsml:reuters.com:*:nL3N0U73BQ 
    Jaiprakash remains the country's third-biggest cement maker 
even after that deal, with a capacity of 22 million tonnes a 
year. 
    The company's deal with Ultratech is pending clarification 
from the government on whether the plant sale will include 
transfer of limestone mining rights too. Existing rules bar the 
transfer of mines between firms if they are not allotted via 
auctions. 
    ($1 = 68.2300 Indian rupees) 
 
 (Additional reporting and writing by Sumeet Chatterjee; Editing 
by Mark Potter) 
 ((sumeet.chatterjee@thomsonreuters.com; +91-22-61807068; 
Reuters Messaging: 
sumeet.chatterjee.thomsonreuters.com@reuters.net)) 
 
Keywords: JAIPRAK ASSO M&A/INDIA