Economy & Market
Jaypee Group to acquire stake in Andhra Cements
Jaypee Group, an infrastructure and real estate major, is acquiring a controlling stake in GP Goenka group's Andhra Cements. It is the second transaction between the two groups in the last 18 months. The deal involves Jaypee Development Corporation, a privately held arm of the group, acquiring 66.7 per cent in Andhra Cements for Rs 234.7 crore. This will be done through share purchase from the GP Goenka group and a preferential allotment of fresh shares, followed by an open offer. While Rs 177 crore will be used for fresh equity infusion, the remaining will be used to buy a part of the stake currently held by the GP Goenka group.
GP Goenka will remain a minority shareholder in Andhra Cements after the transaction. The units of Andhra Cements are currently not operational and the company reported a loss of Rs 35.5 crore on net sale of Rs 65.5 crore last year. Once the current expansion plan of Andhra Cements is completed, Jaypee can add another 3.5 mtpa to its capacity.
The move is being seen as a prelude to the group's plan to sell stake in cement business. The Japyee Cement Corp will have an annual capacity of 8.5 million tonnes and plants in three important states of Andhra Pradesh, Gujarat and Karnataka.