NEW DELHI | Oct 20, 2016: Jaypee Cement has sought the coal ministry’s nod to surrender two captive coal blocks it had won in the auction last year, as it has sold off the attached cement plants.
The two blocks are Majra in Maharashtra and Mandla South in Madhya Pradesh. An email query to Jaypee Group spokesman did not elicit any response till press time Wednesday.
The company has told the ministry that it does not require the coal blocks as it has sold off the attached cement plants, a senior coal ministry official said. Industry executives said the company could not sell the coal blocks with the cement plants.
"The coal ministry has received the representation and is studying it," said the official cited above. "As per auction norms, companies backing off from development of auctioned coal blocks are barred from coal block bidding for a year and their bank guarantees equivalent to a year’s revenue from the mines can be seized."
Orient Cement Ltd, part of the CK Birla Group, had on October 6 said that it had agreed to buy two cement assets of the debt-ridden Jaypee Group in Chhattisgarh and Madhya Pradesh for Rs 1,950 crore. These include Bhilai Jaypee Cement, in which Orient is acquiring 74 per cent stake for Rs 1,450 crore, and the Nigrie cement grinding unit in Madhya Pradesh, which is being bought for Rs 500 crore.
Bhilai Jaypee Cement owns a 2.2 million tonnes per annum (MTPA) cement making capacity at Satna in Madhya Pradesh and a 1MTPA grinding unit at Bhilai in Chhattisgarh. Steel Authority of India owns 26 per cent in Bhilai Jaypee Cement. The Nigrie cement grinding unit has a capacity of 2 MTPA.
Jaypee Cement had emerged the highest bidder for the Majra coal block in Maharashtra with a bid of Rs 1,230 per tonne. It had outbid ACC Ltd, Crest Steel and Power, Emami Cement, Grace Industries and JK Lakshmi Cement to secure the block with total extractable reserves of 14.92 million tonne. The block was previously owned by Gondwana Ispat.
The company won the Mandla South block with a bid of Rs 1,852 a tonne. The ready-to-produce block has extractable reserves 13.35 million tonne and is reserved for the non-power sector. The block was previously owned by MP State Mining Corporation.
The Jaypee Group had earlier sold three power plants to JSW Energy for Rs 12,400 crore. In July, Aditya Birla Group’s UltraTech Cement bought 21.1 MTPA cement assets of Jaiprakash Associates for Rs 16,189 crore. The consolidated debt of Jaypee Group was Rs 67,500 crore as on March 2016.
Earlier, Monnet Ispat & Energy had told the Delhi High Court that it has sought to surrender the Utkal-C coal block in Odisha, which it had secured for its power plant in the second round of the coal auctions.
(Source: http://economictimes.indiatimes.com/)