The deal covers cement plants in Andhra Pradesh, Madhya Pradesh, Himachal Pradesh, Uttar Pradesh and Uttarakhand, but not the 1.2 million tonnes/year plant in Karnataka originally considered. This takes about INR 6 billion off the previously estimated transaction size.
Some 4 million tonnes/year the 21.2 million tonnes capacity is still under commissioning.
As part of the deal, UltraTech will take over INR 115 billion of Jaypee debt, which it can refinance more easily due to its good credit rating. The takeover awaits regulatory approvals and will take 12-14 months to close.
After the transaction, UltraTech will reach a cement capacity of 91 million tonnes/year.
Jaypee will be left with 10.6 million tonnes/year of capacity in Karnataka, Andhra Pradesh, Madhya Pradesh and Uttar Pradesh.
Lenders have been asking the Jaypee Group to sell assets to reduce its INR 600 billion debt.