RInfra sells cement business to Birla to pare debt

Reliance Infrastructure (RInfra), on Thursday sold its cement business arm to Birla Corporation for Rs4,800 crore, a deal that will help Anil Ambani-led Group lower its debt burden.

"RInfra today announced the signing of share purchase agreement with Birla Corporation Limited, the flagship Company of the M P Birla Group, in relation to 100 per cent sale of its subsidiary RCCPL," the Reliance Group company said in a statement.

"The deal values the cement business at Rs4,800 crore at $140/tonne," it said adding that the proceeds will be utilised for debt reduction.

RCCPL has an integrated cement capacity of 5.08 million tonne per annum (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 Ltd will acquire the 100 per cent shareholding of RInfra in RCCPL. The transaction is subject to approval of the Competition Commission of India and other applicable regulatory approvals," the company said.

It added that SBI Capital Markets acted as the financial advisors to RInfra for this transaction.

RInfra is one of the largest infrastructure companies, developing projects through various special purpose vehicles (SPVs) in several high growth sectors such as power, roads, metro rail, cement and defence.

Birla Corporation has presence across cement and jute and cement constitutes over 90 per cent 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.