Ambani's Reliance Infrastructure Gains After Cement Plants Saleby
Shares of Reliance Infrastructure Ltd. gained after it agreed to sell its cement business to Birla Corp., a move that will help Indian billionaire Anil Ambani pare debt at the construction company.
The deal, which values Reliance Cement Co. at 48 billion rupees ($709 million), will add 5.08 million metric tons annually to Birla’s cement capacity, taking its total to 15.5 million tons, the Kolkata-based conglomerate which sells jute, cotton yarns and flooring materials besides cement, said in an exchange filing. Reliance Infrastructure’s shares rose 3.1 percent to 421.25 rupees at 9:17 a.m. in Mumbai, the most since Jan. 29, while Birla added 0.7 percent to 397.05 rupees.
Ambani’s group has been announcing deals to sell assets across its companies to pare debt and expand defense manufacturing, its newest business. In November, Reliance Infrastructure, which has a net debt of 280 billion rupees, said it was selling a 49 percent stake in its power transmission business in Mumbai to Canada’s Public Sector Pension Investment Board. It’s also looking to sell its road projects.
Birla said in a Feb. 2 exchange filing that Lafarge SA’s Indian unit had scrapped an agreement it signed last year to sell two of its cement units for a total enterprise value of 50 billion rupees. The company “is in the process of taking appropriate legal measures,” according to the filing.