Reliance Cement, which has three plants with an annual capacity of 5.5 million tonnes, may announce the deal as early as this week
New Delhi : Reliance Infrastructure is in the advanced stage of negotiations to sell its cement business and a deal can be announced as early as this week as the Anil Ambani-led firm tries to cut debt.
The Mumbai-based firm is in talks with buyers — both domestic and foreign — to sell its cement and road business, in which it has invested over Rs 15,000 crore, that will be utilised to cut debt and also to fund its foray into defence manufacturing. Media reports estimated the deal at Rs 2,600 crore ($394 million).
The company is in advanced stage of negotiations with 7 prospective buyers out of the initial 15 parties, and the deal can be finalised anytime now, a source said adding it can be announced as soon as Ambani returns from Russia and could be this week also.
The buyers include Blackstone, Carlyle and KKR. Ambani, who is accompanying Prime Minister Narendra Modi on his two-day Russia visit, is likely to return on Saturday night. If this gets delayed, the final deal can be announced early next week, sources told PTI.
“The cement deal is in the range of Rs 5,000-6,000 crore and the company expects to get close to 50 per cent of the amount after paring the debt,” he added. Reliance Cement, which has an annual capacity of 5.5 million tonnes, started operations in 2007. It has plants at Maihar in Madhya Pradesh (2.8 million tonne per annum), Kundanganj in Uttar Pradesh (2.2 MTPA) and Butibori in Maharashtra (0.5 MTPA).
The stock climbed 7.69 per cent to settle at Rs 493.05 on BSE. During the day, it rose by 8.33 per cent to Rs 496.
Reliance Infrastructure, with a net worth of over USD 4 billion, is trying to sell its non-core assets, including the road business to pare debt and fund expansion in the defence manufacturing sector, which it feels will be the primary driver for future growth.
With industrial licences for various military platforms, Reliance Defence is one of the fastest emerging private firms, that wants to tap the lucrative development, manufacture and supply of defence aerospace, land and naval platforms and equipment. Reliance Infra’s debt stood at around Rs 25,100 crore at March 31, 2015.
