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Orient Cement calls off deal with Jaypee Group; stock gains 15%

The stock rallied 15% to Rs 140 on the BSE in intra-day trade on back of heavy volumes

SI Reporter  |  Mumbai 

Orient Cement has moved higher by 15% to Rs 140 on the BSE in intra-day trade, after the company announced the termination of an agreement with Jaypee Group companies to acquire Nigrie cement grinding unit and Bhilai Jaypee Cements due to its inability to complete the deal within the stipulated timeframe.

Orient Cement on May 31, 2017 had executed share purchase agreement entered into between the Company and Jaiprakash Associates for the acquisition by the Company of 74% equity shares of Bhilai Jaypee Cement from Jaiprakash Associates; and business transfer agreement entered into between the Company, Jaiprakash Power Ventures and Jaiprakash Associates, for the acquisition by the Company of the Nigrie Cement Grinding Unit, as going concern from Jaiprakash Power Ventures.

Under the provisions of the Share Purchase Agreement and the Business Transfer Agreement, either party is entitled to terminate the agreement if the closing does not take place within the expiry of 12 months from the date of execution of the Share Purchase Agreement and the Business Transfer Agreement, as the case may be.

Accordingly, since the closing has not been achieved within the said period of 12 months, the Company has terminated the Share Purchase Agreement and the Business Transfer Agreement with notice to the other parties, Orient Cement said in a regulatory filing.

Despite of todays an over 10% rally, shares of Orient Cement has underperformed the market by falling 17% in past three months. On comparison, the S&P BSE Sensex was up 2.5% during the same period.

At 11:41 am; the stock was trading 10% higher at Rs 133 on the BSE, against 0.37% rise in the benchmark index. The trading volumes on the counter more than doubled with a combined 624,090 shares changed hands on the BSE and NSE.

Jaiprakash Associates was trading 2% lower at Rs 15.45, while Jaiprakash Power Ventures down 1% at Rs 3.50, trading close to its 52-week low of Rs 3.41 touched on May 14, 2018 on the BSE.

First Published: Thu, May 31 2018. 11:43 IST
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