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Adani Group may soon acquire Jaypee Cement. Jaypee Cement’s annual capacity is more than 90 lakh tonnes. Moneycontrol sources have given this information. Jaypee Cement is going through bankruptcy process. Lenders had initiated the process against Jaypee Cement under the Insolvency and Bankruptcy Code (IBC) in early June.
On June 3, almost six years after the petition was filed by ICICI Bank, the National Company Law Tribunal (NCLT) court in Allahabad accepted Jaiprakash Associates Limited for corporate bankruptcy. According to sources, due to the initiation of proceedings against Jaiprakash, the opportunity has opened up for Adani Group to acquire the company’s cement assets along with associated assets such as limestone mines and a power plant.
Adani Group starts plan to buy assets of JP Cement
According to the source, Adani Group has already started working on the plan to acquire the assets of Jaypee Cement. However, if we talk about the bankruptcy process, it is still in the initial stage. Jayaprakash was admitted to NCLT last month and its Committee of Creditors has met only once so far, on June 29.
The process of sale of assets of Jaiprakash Associates has not started.
The formal process of sale of assets of Jaiprakash Associates has not yet started. Dalmia Bharat had signed a deal with Jaypee to buy its cement and power assets in 2022 at an enterprise value of Rs 5,666 crore. However, the deal has not been completed yet as JP Associates could not get approval from its lenders.
Mediation going on between Jaiprakash and UltraTech Cement
Apart from this, the matter may also get delayed due to the ongoing arbitration between Jaiprakash and UltraTech Cement for an asset, Jaypee Super Dalla. Dalmia’s proposed deal included the acquisition of 22 lakh tonnes of cement capacity in Bhilai as well as 33 lakh tonnes of clinker at Babupur in Madhya Pradesh and Jaypee Super in Uttar Pradesh.
In the case of the 2 MTPA cement plant at Nigri in Madhya Pradesh, Dalmia was to enter into a seven-year lease agreement with an option to purchase the unit at any time within the lease period. The acquisition of Jaypee Super assets was dependent on the outcome of the arbitration case between Jaiprakash Associates and UltraTech Cement.
Dalmia was about to enter into a seven-year lease agreement.
Dalmia was about to enter into a seven-year lease agreement for a 20 lakh tonne per annum capacity cement plant in Nigri, Madhya Pradesh. Under this agreement, there was an option to purchase the unit at any time during the lease period.
The acquisition of JP Super was dependent on the outcome of this case
The path to acquisition of Jaypee Super depended on the outcome of the arbitration case between Jaiprakash Associates and UltraTech Cement. Ultra Tech Cement had a few months ago said it planned to acquire Jaiprakash Associates’ Dalla Super (formerly Jaypee Super) cement assets in Uttar Pradesh after the completion of the arbitration process. These assets were part of the deal between Ultra Tech and Jaiprakash Associates in 2016.
Aditya Birla Group had bought the stake of India Cements in June.
The bankruptcy process against Jaypee Associates may further increase competition in the cement sector. Big players like UltraTech, Adani, Dalmia and JSW Cement are competing for assets across the country. On June 27, Aditya Birla Group’s cement company UltraTech had bought 19.44% stake of India Cements at Rs 267 per share. Apart from this, it will buy 3.4% stake at the rate of Rs 285 per share i.e. it will buy 23.44% stake of India Cements for about Rs 1,900 crore.
Adani Group had announced the purchase of Penna Cement last month.
Apart from this, if we talk about Adani Group, Ambuja Cements had last month announced the purchase of Penna Cement of Hyderabad at an enterprise value of Rs 10,422 crore. This is Adani Group’s third purchase since entering the cement sector in less than two years.
Adani Group bought stake in Sanghi Industries in December 2023
The purchase of Penna will increase Adani Group’s cement capacity by 14 million tonnes per annum and take its total capacity to 89 million tonnes per annum. In December 2023, Adani Group had acquired controlling stake in Sanghi Industries in a deal worth Rs 5,185 crore, which added 61 crore tonnes per annum capacity to the Adani Group’s portfolio.
Adani Group is expanding rapidly in the cement sector. After the acquisition of ACC and Ambuja Cement, it became the second largest company in the country. After this the group has included more cement companies in its group.
