Orient Cement spikes 8 per cent on termination of acquisition deal
The stock of Orient Cement was buzzing on the bourses as the company terminated agreements to acquire cement plants from Jaypee Group. Investors seem to cheer the development and the stock was trading up by close to 8 per cent in the early morning session on Thursday.
On May 31, 2017, Orient Cement Limited had signed a definitive agreement with the Jaypee Group companies to acquire two cement units Bhilai Jaypee Cement and Nigrie Cement in an all cash deals. Orient Cement was to acquire 74 per cent share of Bhilai Jaypee Cement, which is a JV between Jaiprakash Associates Limited (JAL) and Steel Authority of India (SAIL). The other plant Nigrie Cement Grinding Unit is run by Jaiprakash Power Ventures (JPVL). The deal was to close by March 2018. The total enterprise value of deal was estimated to be Rs. 1,946 crore.
Earlier, there were reports that the acquisition was being delayed due to pending approvals from JV partners. The only reason for the termination cited in Orient Cement's filing to the exchange was expiry of the agreement which was valid for 12 months.
On Thursday at 9:30 hours, the stock of Orient Cement was quoting Rs. 131.40 per share, up by 8.55 per cent on BSE.