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Saturday, February 27, 2016

UltraTech pulls out of Rs.5,400-cr Jaypee deal

Kumar Mangalam Birla-led UltraTech has called off a Rs.5400-crore deal to buy Jaypee Group’s 2.1 mtpa cement plant in Madhya Pradesh as new MMDR Act 2015 barred transfer of mines not allocated through auctions
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UltraTech was forced to call off the deal after the Bombay High Court refused to approve the scheme of arrangement entered between UltraTech Cements and Jaiprakash Associates (JAL), for acquisition of entire cement business along with mining rights situated at Bela and Siddhi in Madhya Pradesh.

The Bombay High Court cited recent amendments in the provisions of the Mines and Minerals (Development and Regulations) Act of 1947, that prevented transfer of mines granted other than through auction. “Under the circumstances, it was decided to apply for the withdrawal of the scheme filed before the High Court, which was permitted by the High Court at the hearing held on 25 February 2016,” according to a statement from UltraTech. “Since the Regulatory approvals (including sanction of Hon'ble Bombay High Court) could not be received prior to the Long Stop Date, the Scheme stands revoked,” according to a separate statement from JAL.

The move comes when UltraTech is said to be in race to buyout Jaypee Group’s 20 mtpa cement assets, valued at Rs.20,000 crore along with other buyers like private equity firm KKR & Co. Dalmia Cement (Bharat) Ltd and Sajjan Jindal led JSW Group. Aditya Birla Group chairman Kumar Mangalam Birla had told The Hindu that UltraTech will maintain its leadership position in India.

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