The Bombay HC declined to sanction the deal as the amended Mines and Minerals (Development & Regulation Act) prevents any transfer of mines other than through auctions
New Delhi : The Rs 5,400-crore deal between India’s largest cement maker Ultratech and Jaiprakash Associates (JAL) to acquire the latter’s two cement plants has been called off on account of lack of regulatory approvals.
Aditya Birla Group’s flagship firm UltraTech Cement said it has called-off the deal, which is a blow to the debt ridden Jaiprakash Associates, who has been selling its cement and power assets to pare debt and improve balance sheet.
In a regulatory filing today, Ultratech said: “The Bombay High Court has indicated that based on the recent amendments in the provisions of the Mines and Minerals Act, 1947 (MMDRA), preventing transfer of mines granted other than through auction. “… and in absence of any clear timelines for any amendment/clarifications in MMDRA, the court cannot sanction this scheme.”
In one of the biggest deals in the cement sector, in December 2014, Ultratech had said it will acquire JAL’s Bela unit (Madhya Pradesh), which has 2.1 million tonnes per annum (mtpa) clinker and 2.6 mtpa cement grinding capacity.
The other unit, located at Sidhi also in Madhya Pradesh, has 3.1 mtpa clinker and 2.3 mtpa cement grinding capacity. Both units have a total of 180 MW power generation capacity.
The deal included transfer of limestone reserves in Madhya Pradesh that were allotted to the plants.
However, last year the government had made a law that did not allow allotment of any new mine without auction, in effect scuttling the deal. Jaiprakash Associates Ltd has been selling its assets to cut debt and has sold some cement plants in the past too. Shares of UltraTech Cement ended down 0.3% at Rs 2,770.95 on the National Stock Exchange, while shares of Jaiprakash Associates ended flat at Rs 6.75.
(To receive our E-paper on whatsapp daily, please click here. We permit sharing of the paper's PDF on WhatsApp and other social media platforms.)