Jaiprakash Associates plans to sell assets to reduce debt

According to reports, Jaiprakash Associates is looking to offload assets in southern and western India in a bit to reduce US$10 billion in debt. It is thought the cement producer hopes to raise Rs.15 000 crore by selling cement plants, power generation units and property over the course of a year. Some 30% of its 35 million t capacity is set to go, with billionaire Kumar Mangalam Birla reportedly in talks to acquire the 4.8 million t cement unit in Gujarat.

The massive debt was accumulated as the company sought to expand its power, sports and construction businesses. Profit has been falling for the last two years and as interest rates look set to rise, the company needs to get rid of some of that debt, which is said to be the second highest among Asian cement producers after China National Building Material Co.

In addition to cement plants and power units, the group also hopes to sell about 200 acres of land and aims to achieve home sales of around Rs.1000 crore each quarter this fiscal.

Jaiprakash Associates, which is part of the Jaypee Group, reported a 27% fall in profit to Rs.460 for the FY12/13 after a 65% drop the previous year. Interest expenses are climbing as the Reserve Bank of India attempts to reverse a slide in the currency.

Edited from various sources by Katherine Guenioui