UltraTech-JAL $ 2.5 b cement plant deal likely by June 2017.

UltraTech Cement’s Rs. 17,000 crore proposed acquisition of Jaiprakash Associates’ cement plants is expected to be completed by June 2017, a top official from the Aditya Birla Group’s flagship firm has said.

UltraTech had announced the acquisition of debt-ridden JP Group’s cement plants for nearly Rs. 17,000 crore (about $ 2.5 billion) few days back, making it the biggest deal in the sector, which will also place India’s largest cement maker in the top five global producers upon completion of the deal.

“We have to ink definitive agreements and get permission from the High Courts. This will take time. The firm expects the agreement to be finalised in the next 12-15 months. Expect it to consummate by June 2017,” Atul Daga, UltraTech Cement Chief Financial Officer, said.

UltraTech is also looking at alternative routes in case the proposed amendments in Mines and Minerals (Development and Regulation) Act does not happen, Dada told analysts yesterday.

Last month, government took views from public, states and industry on amending the MMDR Act to include provisions allowing transfer of captive mines granted through procedures other than auction.

Mines Ministry has prepared the draft Mines and Minerals (Development and Regulation) (Amendment) Bill, 2016 to amend Mines and Minerals (Development and Regulation) Act, 1957.

As part of consultations, government invited suggestions from public, state governments, mining industry and entities concerned, on the draft bill. The last date for sending comments and suggestions was January 26.

The transfer of captive mining leases, granted otherwise than through auction, would facilitate banks and financial institutions to liquidate stressed assets where a company or its captive mining lease is mortgaged.

The move will allow M&As worth billions of dollars in the domestic market, especially in the cement sector where several such deals are stuck.

HBL