Italian cement maker Italcementi is said to be in talks to bid for one of the two cement plants of Jaiprakash Associates in a deal worth about $500 million (Rs 2,800 crore), sources said on Friday.An Italcementi spokesman however said: "Italcementi denies having any talks under way with Jaiprakash Associates in India, even though we confirm the interest of the group in evaluating any opportunities for growth in the country." Jaiprakash declined to comment.
Jaiprakash plans to raise up to $1.6 billion (Rs 8,960 crore) from the sale of the two cement plants in Gujarat and Andhra Pradesh to help pay down part of its $8 billion (Rs 44,800-crore) debt.
Italcementi is likely to offer about $100 per tonne for the factory in Andhra Pradesh, which has the capacity to produce 5 million tonnes of cement a year, sources said.
Jaiprakash is seeking about $150 million per tonne for the two plants that have a combined capacity of nearly 10 million tonnes, sources said.
“Italcementi will bid for the Andhra Pradesh plant to boost its presence in the southern region of the country,” a source said, adding, the Italian company will start due diligence soon.
Irish building materials group CRH and Aditya Birla group firm UltraTech are also said to be in the race to buy the plants.
UltraTech, which has an annual capacity of 52 million tonnes, is interested in buying only the Gujarat plant, while CRH, which has a 50% stake in another cement plant in AP, is looking to buy both, sources said.