PRESS RELEASE

11 September 2013

UltraTech Cement Limited to acquire the Gujarat Cement Unit of 4.8mtpa of Jaypee Cement Corporation Limited in Gujarat


The Board of Directors of UltraTech Cement Limited at its meeting held today approved the acquisition of the Gujarat Cement Unit of Jaypee Cement Corporation Limited (JCCL), by way of a demerger, comprising of an integrated cement unit at Sewagram and Grinding Unit at Wanakbori. JCCL is a wholly-owned subsidiary of Jaiprakash Associates Limited (JAL).

Comments Mr. Kumar Mangalam Birla, Chairman, UltraTech Cement Limited, “With this acquisition of 4.8mtpa the Company’s current capacity increases to 59mtpa. With projects underway, it will stand raised to 70mtpa by 2015. Despite the prevailing muted growth of the industry, we believe the long term fundamentals and growth prospects remain intact. We will add more capacities in coming years.”

The enterprise value is Rs.3,800 crores besides the actual net working capital at closing. UltraTech will take over all the assets and the liabilities of the Unit at Closing and the net amount of enterprise value less liabilities taken over will be the consideration. Such consideration will be discharged by allotment of equity shares of UltraTech to the shareholders of JCCL, subject to a maximum value of such equity shares to be Rs.150 crores.

The combined capacity of both the divisions of the Gujarat Unit is 4.8mtpa of cement with 57.5 MW Coal based Thermal Power Plant, limestone reserves for over 90 years at current capacity and a captive Jetty at Sewagram.
 
Avers Mr. O. P. Puranmalka, Whole-time Director of the Company, “Besides giving us a stronger production base in Gujarat to serve the local market, it will also bolster our coastal footprint enabling us to cater to other regions of India and exports.”

“The transaction will also help us realize logistics gains and be value accretive in the medium term” adds Mr. Kailash Birla, the CFO of UltraTech,

The proposed transaction is subject to the approval of shareholders and creditors, sanction of the Scheme of Arrangement by the High Courts, approval of the Competition Commission of India and all other statutory approvals. We anticipate the transaction to close in 7 to 9 months.

Transaction advisor:   Standard Chartered
Independent Fairness Opinion: Axis Capital Limited
Legal Advisor: Amarchand & Mangaldas & Suresh A. Shroff & Co.
Valuation Expert:

Bansi S. Mehta & Co.