Dalmia Bharat on Friday said it will acquire the cement assets of debt-ridden Jaiprakash Associates, which has been acquired by billionaire Gautam Adani-led Adani Enterprises through insolvency proceedings.
Dalmia Cement, a company owned by Dalmia Bharat, has signed a deal with Jaiprakash Associates to buy some of their assets. This deal is expected to be finished in just two weeks, according to a recent statement. The agreement they signed is called a Business Transfer Agreement, which means they are transferring some business from one company to another.
Following the takeover, Dalmia Bharat’s cement capacity will increase to 54.7 million tonne per annum (MTPA).
Dalmia Bharat has announced that they’ve signed a big deal, known as the BTA, to buy several cement plants. These plants are located in different parts of India – Rewa in Madhya Pradesh, and Churk, Chunar, and Sadwa in Uttar Pradesh. Together, they can produce a huge amount of cement, 5.2 million tons per year, and clinker, 3.3 million tons per year. The company is paying a whopping ₹2,850 crore for these plants, which is a significant investment. This move is likely to boost Dalmia Bharat’s presence in the cement industry and increase their production capacity.
The acquisition also includes 99 megawatts of thermal power capacity, along with a railway siding. Dalmia Bharat considers this deal a “strategic fit” because it will not only help the company diversify its market, but also reduce its dependence on any one region, making it less vulnerable to fluctuations in the market. This move is expected to bring more stability to the company’s operations.
Dalmia Bharat revealed that the funding will come from a combination of debt and internal accruals.
The company is working on some big projects to increase its cement production. It’s expanding its facilities in Belgaum, Pune, and Kadapa, which will help it make a lot more cement. By the second or third quarter of the financial year 2028, the company expects to be able to produce 66.7 million tons of cement per year.
Puneet Dalmia, the managing director and CEO of Dalmia Bharat, stated that their previous experience with these assets through a tolling arrangement has provided them with a thorough understanding of the facilities. This, he believes, will enable the company to establish a strong connection with its channel partners and vendors. As a result, Dalmia Bharat is confident that it will be able to quickly increase its production capacity and make rapid inroads into the market. With this existing knowledge, the company is well-positioned to hit the ground running and make the most of the new opportunities that lie ahead.
DCBL made a deal with JAL in December 2022, before things started going wrong, to sell its business assets. This deal included other important agreements, like a BTA and a contract to buy and sell cement.
These agreements were made to resolve all issues with JAL, including those related to their long-term contract for supplying clinker.
But before everything was finalized, JAL went bankrupt and the sale fell through.
On June 3, 2024, things took a turn for JAL when the Corporate Insolvency Resolution Process was started. This happened after the Allahabad bench of the National Company Law Tribunal, or NCLT for short, agreed to look into a petition filed by ICICI Bank.
Later, NCLT approved Adani Enterprises’ ₹14,535 crore resolution plan to take over the bankrupt flagship firm.
After the resolution plan was approved, DCBL asked that the earlier agreement be taken into account to resolve all the outstanding issues with JAL.