Cement News

jaypee group: Dalmia Bharat’s deal to buy Jaypee’s cement assets hits a legal hurdle


Dalmia Bharat’s acquisition of Jaiprakash Associates’ cement assets for ₹5,666 crore has hit a legal hurdle due to a shareholder dispute at one of the joint-venture plants that was to be acquired as part of the transaction, according to sources aware of the matter.

As per stock exchange disclosures by New Delhi-based Dalmia Bharat, India’s fourth-biggest cement entity after UltraTech, the Adanis and Kolkata-based Shree Cement, it had signed multiple agreements with Jaiprakash Associates, or the Jaypee Group, for acquisition of cement assets in December last year.

One such agreement involves the acquisition of a stake in Jaypee Bhilai Cement, a 74:26 joint venture between Jaiprakash Associates and Steel Authority of India Limited (SAIL), and housed within the larger SAIL facilities at Bhilai in Chhattisgarh.

The Allahabad bench of the National Company Law Tribunal (NCLT) has ordered a freeze on Jaypee’s shareholding in Jaypee Bhilai Cement and instructed the company not to create any third-party rights on the company’s shares or to transfer any shares.
Dalmia Bharat, the Jaypee Group and SAIL did not comment when contacted.ET had reported last year that SAIL had approached NCLT alleging mismanagement of affairs of its JV company with the Jaypee Group. It had alleged that Jaiprakash Associates transferred shares of Jaypee Bhilai Cement to lenders without taking consent of the steelmaker.The freeze on shareholding was ordered by NCLT as part of reliefs granted to SAIL. The matter is still in the courts and the tribunal has not arrived at a decision on the lawsuit. Done Deal

On April 26, Dalmia Bharat informed stock exchanges that its wholly owned subsidiary, Dalmia Cement (Bharat), had executed definitive agreements with Jaiprakash Associates to acquire the latter’s cement, clinker and power plants. Separate agreements have been signed for the acquisition of JP Super, which owns cement plants and mines, Jaypee Bhilai Cement that is at the centre of a shareholder dispute, and Jaiprakash Power Ventures, whose cement grinding units are to be acquired.


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