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Orient Cement share price rallied more than 15 percent intraday Thursday after the company called off a deal to acquire 2 units from Jaypee. Jaiprakash Associates lost 3 percent.
The CK Birla Group firm has terminated the agreement to acquire two entities, Bhilai Jaypee Cement and Nigrie Cement Grinding Unit, from Jaypee group firms for a total consideration of Rs 1,946 crore.
On May 31 last year, Orient Cement had signed a share purchase agreement (SPA) with Jaiprakash Associates (JAL), for acquisition of 74 percent equity shares of Bhilai Jaypee Cement Ltd from JAL.
A business transfer agreement (BTA) was also signed between Orient Cement, Jaiprakash Power Ventures Ltd (JPVL) and JAL, for acquisition of Nigrie Cement Grinding Unit, as going concern from JPVL.
"Under provisions of the SPA and the BTA, either party is entitled to terminate the agreement if the closing does not take place within expiry of 12 months from date of execution of the SPA and the BTA.
"Since the closing has not been achieved within said period of 12 months, the company has terminated the SPA and the BTA with notice to other parties," Orient Cement said in a regulatory filing.
The SPA and the BTA stand terminated, it added.
Bhilai Jaypee Cement has a cement manufacturing capacity of 2.20 million tonnes (MT) and 1.10 MT of clinker. In 2015-16, it had a turnover of Rs 399.27 crore.
While, Singrauli, Madhya Pradesh-based Nigrie Cement Grinding Unit has a production capacity of 2 MT. It had a turnover of Rs 90.70 crore in 2015?16.
JPVL is a power generation company with a capacity of 2,220 MW comprising one hydro and two thermal power plant.
At 14:15 hours IST, the share price of Orient Cement was quoting at Rs 130.10, up 7.48 percent while Jaiprakash Associates was down 2.5 percent at Rs 15.35 on the BSE. (With inputs from PTI)
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