Birla close to Jaiprakash cement plant deal

Ultratech Cement Ltd., backed by Indian billionaire Kumar Mangalam Birla, is nearing an agreement to acquire Jaiprakash Associates Ltd.'s cement grinding plant in central India, people with knowledge of the matter said.

The nation's largest cement maker is in advanced talks to buy the Jaiprakash facility in Bhilai, in Chhattisgarh state, they added. It has been discussing a purchase price of Rs 600 crore to Rs 700 crore ($106 million) for the plant, which has 2.2 million tonnes of annual production capacity, the people said, asking not to be named as the matter is private.

An acquisition would help Birla's conglomerate meet its target of increasing cement capacity to 100 million tonnes in a decade, a vision the billionaire outlined in November 2014. It would mark Ultratech's fourth purchase of a cement plant from the Jaiprakash group, which has been selling assets to repay debt.

The two companies are waiting for a nod from state-run steelmaker Steel Authority of India Ltd, which owns 26 per cent of the plant, before finalizing the deal, the people said.

Pragnya Ram, a spokeswoman for the Aditya Birla Group that controls Ultratech, declined to comment. Madhu Pillai, a spokeswoman for Jaiprakash, said the group doesn't respond to speculation, while Rakesh Singhal, a spokesman for SAIL, said he couldn't immediately comment.

Ultratech agreed in December to buy two of Jaiprakash's central Indian cement plants at an enterprise value of 54 billion rupees. That deal followed its 2014 purchase of a Jaiprakash cement facility in the western state of Gujarat for 38 billion rupees including debt.

Shares of Jaiprakash Associates climbed 2.4 percent to 8.70 rupees in Mumbai on Wednesday and Ultratech rose 0.5 percent to 2,905.10 rupees, compared with a 1.2 percent decline in the benchmark S&P BSE Sensex. Jaiprakash has tumbled 65 percent this year versus an 8.6 percent gain for Ultratech.