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Dalmia Bharat has signed a Business Transfer Agreement through its subsidiary Dalmia Cement (Bharat) Ltd to acquire cement assets of debt-laden Jaiprakash Associates, currently under insolvency proceedings and acquired by Adani Enterprises via a resolution plan. The transaction, valued at an enterprise value of INR 2,850 crore, includes cement plants in Madhya Pradesh and Uttar Pradesh with 5.2 MTPA capacity, 3.3 MTPA clinker capacity and 99 MW of thermal power assets. Post acquisition, Dalmia Bharat’s capacity will rise to 54.7 MTPA.
Dalmia Bharat on Friday said it will acquire the cement assets of debt-ridden Jaiprakash Associates through a Business Transfer Agreement (BTA), executed by its wholly owned subsidiary Dalmia Cement (Bharat) Ltd (DCBL), as part of a transaction arising out of the insolvency proceedings of the latter. The development was announced in New Delhi on May 22. Advertisement
The acquisition pertains to cement assets of Jaiprakash Associates Ltd (JAL), a company that has been undergoing the Corporate Insolvency Resolution Process (CIRP). The resolution process was initiated on June 3, 2024, after the Allahabad bench of the National Company Law Tribunal (NCLT) admitted a petition filed by ICICI Bank. Subsequently, Adani Enterprises was approved by the NCLT with a resolution plan worth INR 14,535 crore to take over the bankrupt flagship company.
Dalmia Bharat stated that DCBL has already executed the Business Transfer Agreement with JAL, and the transaction is expected to be completed within two weeks. The agreement covers cement manufacturing assets located at Rewa in Madhya Pradesh, and Churk, Chunar and Sadwa in Uttar Pradesh.
The acquired assets include a cement production capacity of 5.2 million tonne per annum (MTPA) and clinker capacity of 3.3 MTPA. Additionally, the transaction includes 99 MW of thermal power capacity along with railway siding infrastructure, which is expected to support logistics and operational efficiency for the business.
The enterprise value of the transaction has been pegged at INR 2,850 crore. Dalmia Bharat said the acquisition is a strategic fit, enabling it to expand its market presence, diversify geographically and reduce regional volatility in its operations. Following completion of the deal, the company’s total cement capacity is expected to increase to 54.7 MTPA.
The company indicated that the funding for the acquisition will be structured through a mix of debt and internal accruals. It further noted that ongoing expansion projects at Belgaum, Pune and Kadapa will contribute additional capacity, taking the company’s total installed cement capacity to 66.7 MTPA by the second or third quarter of FY28.
Managing Director and Chief Executive Officer Puneet Dalmia said the company’s prior familiarity with the assets, under earlier tolling arrangements, provides operational advantage and helps establish stronger relationships with channel partners and vendors. This is expected to facilitate faster ramp-up of capacities and quicker market penetration after acquisition.
Dalmia Bharat also highlighted that it had previously entered into a framework agreement with Jaiprakash Associates in December 2022, before the insolvency process began, for the sale and purchase of business assets. However, the transaction could not be completed due to the initiation of insolvency proceedings against JAL. The company has now moved to align the earlier arrangement with the resolution process in order to settle pending disputes and proceed with the acquisition under the approved framework.
Source - PTI
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