RInfra Signs Final Agreement With Birla Corp for sale of its Cement Plant

Rs 4800 crore Deal at 140% equity premium

RInfra Signs Final Agreement With Birla Corp for sale of its Cement Plant

In a deal that will help Reliance Infrastructure Limited (RInfra) lower its debt burden, RInfra on February 4, 2016 announced the signing of the final Rs 4800 crore agreement to sell its cement arm to Birla Corp.

A company statement said that a Share Purchase Agreement was inked with Birla Corporation Limited, the flagship Company of the M P Birla Group by RInfra for 100% sale of its subsidiary Reliance Cement Company Private Limited (RCCPL).

RCCPL has an integrated cement capacity of 5.08 Mtpa at Maihar, Madhya Pradesh and Kundanganj, Uttar Pradesh and a grinding unit of 0.5 Mtpa at Butibori, Maharashtra.

“Under this transaction Birla Corporation Limited will acquire the 100% shareholding of RInfra in RCCPL. The transaction is subject to approval of the Competition Commission of India and other applicable regulatory approvals,” the company added.

SBI Capital Markets Limited acted as the financial advisors to R Infra for this transaction.
RInfra is one of the largest infrastructure companies, developing projects through various Special Purpose Vehicles (SPVs) in several high growth sectors within the infrastructure space such as Power, Roads, Metro Rail, Cement and Defence.

Birla Corporation Limited, established in 1919, is part of the MP Birla Group with presence across cement and jute; cement constitutes over 90% of the company’s revenues. With a total operational cement capacity of ~10 mtpa, it has units in Rajasthan, Madhya Pradesh, Uttar Pradesh and West Bengal.

RInfra is also a leading utility company having presence across the value chain of power businesses i.e. Generation, Transmission, Distribution and Power Trading.

RInfra through its SPVs has executed a portfolio of infrastructure projects such as a metro rail project in Mumbai on build, own, operate and transfer (BOOT) basis; eleven road projects with total length of 1,000 kms on build, operate and transfer (BOT) basis. RInfra also provides Engineering, Procurement and Construction (EPC) services for developing power and road projects.
RInfra has recently entered into the defence sector. The Maharashtra Government has allotted 290 acres of land at Mihan near Nagpur for the development of India’s first smart city for the defence sector known as Dhirubhai Ambani Aerospace Park (DAAP). RInfra has recently completed acquisition of Pipavav Defence and Offshore Engineering Co Ltd (PDOC), which houses India’s largest dry dock facility to build warships and other naval vessels.

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