Mumbai, Feb 4 (IANS) Reliance Infrastructure on Thursday announced a definitive agreement with Birla Corp, the flagship company of the MP Birla Group, to sell the entire 100-percent stake in its integrated cement subsidiary in a deal estimated at Rs.4,800 core.
Reliance Cement has an annual capacity of 5.08 million tonnes at its facilities at Maihar in Madhya Pradesh and Kundanganj in Uttar Pradesh, besides a grinding unit of 0.5 million tonnes at Butibori, near Nagpur, in Maharashtra. The deal is estimated at $140 per tonne capacity.
“Under this transaction, Birla Corp will acquire the 100 percent shareholding of Reliance Infra in Reliance Cement. The transaction is subject to approval of the Competition Commission of India and other applicable regulatory approvals,” the company said in a statement.
SBI Capital acted as the financial advisors to Reliance Group for this transaction, which will be used for reducing the group’s debt, the company added.
Birla Corp has a presence in cement and jute. The cement business constitutes over 90 percent of the company’s revenues with over 10 million tonnes capacity. It has units in Rajasthan, Madhya Pradesh, Uttar Pradesh and West Bengal.
Anil Ambani-led Reliance Infra said in November that the company had decided to sell its 5.8-million-tonne per annum cement firm while initiating the process to hive off the Rs.8,800-crore investment it has made in 11 road projects across seven states.
The steps, the company said, were in tune with the renewed focus on the defence space for growth.
“The 5.8 million tonnes per annum cement business and related assets will be disposed of through a formal process. The Company has short-listed seven potential buyers from a total of 15 parties that submitted preliminary expressions of interest,” the company said.
Addressing the shareholders, Ambani said: “Our capex (capital expenditure cycle) is now complete. Over Rs.30,000 crore has been spent in the last six years and all projects are operational. In the next financial year, you will see the full impact of cash flows.”
He also reiterated that defence and smart cities will be the two drivers of future growth.