Shriram Group to sell Sree Jayajothi Cements stake to Ireland’s CRH for Rs1,400 cr

Shriram Group today agreed to sell its majority stake in cement manufacturer SreeJayajothi Cements to Irish building materials giant CRH, for Rs1,400 crore ($230 million).

The $9-billion Chennai-based Shriram Group through its listed arm Shriram EPC had last year acquired a majority 68-per cent stake in Andhra Pradesh-based SreeJayajothi Cements for nearly Rs500 crore by converting part of its unpaid dues into equity. (See: Shriram to foray into cement via Jayajothi takeover)

Shriram EPC was the engineering, procurement and construction contractor for Sree Jayajothi's modern 3.2 million-tonne per annum (mtpa) cement plant near Banaganapalli in Kurnool district in Andhra Pradesh.

Sine buying a majority stake, the Shriram Group has been scouting for a strategic European partner to buy part or its entire stake, and apart from CRH, other interested suitors reportedly included, cement manufacturers Vicat from France, Portugal's Cimpor, and Switzerland's Holcim, and private equity firms Blackstone Group and KKR & Co.

Set up in 2006 by T R Kannan, Jayajothi Cements also has a two million tonne per annum clinker facility in Kurnool. It has large limestone reserves in the same district, including three new quarries in various stages of getting ministerial and environmental clearances.

CRH, Ireland's largest company, will carry out the acquisition through its Indian equal joint venture with Hyderabad-based My Home Industries.

The Dublin-based company was formed through the 1970 merger between two leading Irish public companies, Cement Ltd and Roadstone Ltd. The group was the sole producer of cement and the principal producer of aggregates, concrete products and asphalt in Ireland.

In 2008 CRH acquired a 50 per cent stake in My Home Industries for $452 million.