Aditya Birla Group-owned UltraTech Cement, has begun talks to purchase an incomplete 6.7-million-tonne cement plant in Gujarat owned by ABG Cement (ABGCL) sources said. Executives of both UltraTech Cement and ABG had three rounds of negotiations. Axis Capital, the investment banking arm of Axis Bank, is advising UltraTech on the deal.
UltraTech has offered around Rs 4,660 crore at $130 a tonne while ABG is believed to be asking for Rs 5,008 crore at $156 a tonne. ABG owns two power plants located close to the main consumption markets of Maharashtra and Gujarat, which are growing at about 10 per cent, and an incomplete jetty.
It is unlikely to get a premium for a non-operational plant that needs additional money to complete, say analysts tracking the sector for more than 15 years. The buyer needs to invest 550 crore to complete the plant, the sources said. UltraTech Cement is India’s largest cement maker, while ABGCL is promoted by ABG Cement Holdco, or ABGHPL.