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Reliance Infra in talks to sell cement unit for $394 mn

India's Reliance Infrastructure  Ltd is in advanced talks to sell its cement business for Rs 26 billion (USD 394 million) and a deal could be announced as soon as this week, said a source with direct knowledge of the matter. Under the terms of the deal, the buyer would also take over the cement unit's outstanding debt of Rs 24 billion, giving the business an enterprise value of Rs 50 billion, the source told Reuters, declining to be identified ahead of a public announcement.

A spokesman for the Reliance Group, a diversified conglomerate whose business interests range from telecoms to finance and infrastructure building, declined to comment. Reliance Infrastructure's cement unit has three plants with total installed capacity of 5.8 million tonne per annum (MTPA). Another 5 MTPA cement manufacturing plant is being developed in western Maharashtra state, according to its website. A consortium, which includes some private equity firms, is likely to emerge as the successful bidder for the unit, said the source, adding seven bidders had been shortlisted earlier and that the sale proceeds would be used to pare the group's debt. Bloomberg earlier on Wednesday reported, citing people familiar with the matter, that Reliance Infrastructure was in talks with cement makers as well as private equity firms including Blackstone Group LP and Carlyle Group LP for the sale. Blackstone and Carlyle declined to comment when contacted by Reuters.

 Reliance Infra stock price On December 24, 2015, at 11:04 hrs Reliance Infrastructure was quoting at Rs 470.70, up Rs 12.85, or 2.81 percent. The 52-week high of the share was Rs 525.35 and the 52-week low was Rs 282.20. The company's trailing 12-month (TTM) EPS was at Rs 59.75 per share as per the quarter ended September 2015. The stock's price-to-earnings (P/E) ratio was 7.88. The latest book value of the company is Rs 786.79 per share. At current value, the price-to-book value of the company is 0.60.

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