Emami Group will sell its cement business to Nirma group arm for Rs 5,500 crore. The Kolkata-headquartered conglomerate announced on Thursday that it has entered into a binding agreement with Nuvoco Vistas, part of the Nirma Group for divesting its 100% equity in Emami Cement for an enterprise value of Rs 5,500 crore.
The move is aimed at paring Emami Group's debt which is around Rs 2,600 crore, however, the promoters of the conglomerate have sought a much higher valuation.
The transaction is likely to be concluded in the next 3-4 months, Emami said in a statement.
"This transaction is an important step in our Group's stated objective of becoming debt-free, and with this transaction, we will substantially achieve this objective," Emami Group Director Manish Goenka said.
"We strongly believe that the Nuvoco and Nirma Group will continue from here and strengthen the business further," Emami Group Director Aditya Agarwal said.
Aditya Birla flagship company UltraTech, Nuvoco Vistas (formerly Nirma Cement), a LafargeHolcim company and Star Cement were in the race for taking over the 8-million tonne capacity cement business of Emami Group.
Emami Cement, which operates in West Bengal, Odisha, Chhattisgarh and Bihar, has one integrated plant and three grinding units.
"Emami Cement will enable us to take our cement business to the next level," Nuvoco Chairman Hiren Patel said.
"This will bring Nuvoco's total cement capacity in eastern, northern and western India to 23.5 million tonnes," he added.