Cimpor eyeing stake in Tamil Nadu company??

Cimpor eyeing stake in Tamil Nadu company??
Published: 31 October 2011

Cimpor is looking to pick up a strategic 51% stake in Rajapalayam, Tamil Nadu-based Sree Jayajothi Cements, local press report.

The talks have reached a ’critical phase’ of valuing the target company. "They (Cimpor ) are really keen on the deal as much as I am,” said TRK annan, managing director, Sree Jayajothi. “If all goes well from here, we may announce it over the next one week,"

Cimpor has agreed to a valuation of INR1800 crore, but Kannan and family-the promoters of Sree Jayajothi-are expecting a valuation of INR2000 crore for the company, which has a INR1,100 crore debt in its book.

However, a Cimpor official said he is not aware of a "deal waiting to happen".

He said: "It is the stated intent for Cimpor to expand in India and China as these are the big growth markets. With specific reference to Sree Jayajothi, I am not aware if there is a deal waiting to happen."

Earlier media reports said that the Sree Jayajothi group was in discussions with Anil Ambani’s Reliance Group for a strategic sale, which sources said fell through because of a valuation mismatch.