Mumbai: Anil Ambani-led Reliance Infrastructure Ltd (R-Infra) has completed the sale of its 100% shareholding in Reliance Cement Co. Pvt. Ltd (RCCPL) to Birla Corp. Ltd, the flagship company of the MP Birla Group. The deal valued the cement business at Rs.4,800 crore.
R-Infra had announced its plan to monetize cement, road and telecom tower assets and the Mumbai Power business to reduce overall debt.
“The (cement) deal was announced in February 2016 and has now been completed with transfer of shares and receipt of sale consideration. The entire proceeds shall be utilized for debt reduction,” R-Infra said in a statement on Monday.
RCCPL has an integrated cement capacity of 5.08 million tonnes per annum (mtpa) at Maihar, Madhya Pradesh and Kundanganj Uttar Pradesh and a grinding unit of 0.5 mtpa at Butibori, Maharashtra.
Birla Corp., established in 1919, has a presence across cement and jute; cement constitutes over 90% of the company’s revenues.
With a total operational cement capacity of 10 mtpa, Birla Corp. has units in Rajasthan, Madhya Pradesh, Uttar Pradesh and West Bengal.
SBI Capital Markets Ltd acted as the financial advisor to R-Infra for this transaction.
Reliance Group is focusing on an asset-light strategy, staying away from projects that will yield results over 20-30 years such as road development and entering new businesses such as defence, housing finance and renewable energy that have shorter gestation periods.
Reliance Group could reduce debt by more than 40% if its asset sale plan goes through and the funds raised are used to pare borrowings, Mint reported on 14 December 2015.
Reliance Group companies have sued HT Media Ltd, Mint’s publisher, and nine others in the Bombay High court over a 2 October 2014 front-page story that they have disputed. HT Media is contesting the case.