Manoj Gaur, Executive Chairman of Jaiprakash Associates said they undertook a call to pare its debt on a consolidated level by selling stake in one of its plants. However, they have still not considered a sale of its Andhra unit to Ultratech, informed Gaur.
The disinvestment program of our cement asset, as part of debt reduction is on
Jaiprakash Associates is in talks with cement major Ultratech to buy stake in its Gujarat plant. Manoj Gaur, Executive Chairman of Jaiprakash Associates said they undertook a call to pare its debt on a consolidated level by selling stake in one of its plants. However, they have still not considered a sale of its Andhra unit to Ultratech , informed Gaur.
At the moment, valuations of USD 160 to 170 per tonne seems attractive levels for the stake sale, added Gaur. He also noted that the company will strike a deal only when the valuations look comfortable.
Moving ahead, Jaiprakash Associates is looking to start the Amelia coal mine in January 2013 and it will be commissioning its first unit of the Nigrie power plant in October 2013, said Gaur.
Here is the edited transcript of the interview on CNBC-TV18.
Q: Have you reached some kind of conclusion in terms of valuation for the Gujarat plant with Ultratech or is it likely to take more time, you have differences in opinion there?
A: You just talked about our disinvestment program. More than a year back we had taken a call that we would be reducing our debt and accordingly, various steps were initiated. Yes, I would say all these transactions take a little time and sometimes, it takes more time than what we anticipate it would take.
But, I do not think that there are a lot of differences in valuation. It is a question of the process and as soon as we would be finalizing the details, we would let you know.
Q: You are confirming though that Ultratech is the buyer in any potential deal that you strike, because Ultratech's last communication indicated that this was speculative talk?
A: I am telling you that the disinvestment program of our cement asset, as part of debt reduction is on and yes we are undoubtedly in talks with them.
Q: We hear that you are not in discussion with them for the Andhra plant. What is the resolution on that front? This is only for Gujarat, but you also had to sell your Andhra plant. On that have you made any progress at all? By when can we expect some conclusion?
A: I do not think that we require to conclusively do this and that. I think it is a matter of opportunity, because some people might take it as an opportunity and some may not take it as an opportunity. But, as far as Andhra is concerned, we had no discussions with them at all.
Q: As you indicated though the stated objective is to pare down the debt that the company has been ridden with in the last few years, how much immediate relief do you expect to see in terms of your debt levels?
A: I think this is something which will be in public domain in times to come. But, there is no desperation to do any deal just for the sake of it. If there are comfortable valuations, then it would definitely be done.
Jaiprakash Asso stock price
On July 25, 2014, Jaiprakash Associates closed at Rs 59.35, down Rs 2.65, or 4.27 percent. The 52-week high of the share was Rs 88.80 and the 52-week low was Rs 28.40.
The company's trailing 12-month (TTM) EPS was at Rs 1.70 per share as per the quarter ended March 2014. The stock's price-to-earnings (P/E) ratio was 34.91. The latest book value of the company is Rs 56.69 per share. At current value, the price-to-book value of the company is 1.05.
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