Grasim and Lafarge are apparently set to compete for the assets of the UP State Cement Corporation (UPSCCL). They have competed earlier also, the only difference being that this time they are not alone. There are two others in the fray. These are Dalmia Cement and Jaypee Industries, turning the battle into at least a triangular contest, if not a four-cornered one. The reserve price for auction has been kept at Rs 271 crore, which is Rs 40 crore higher than the price at which the previous deal between the Uttar Pradesh (UP) government and Grasim was concluded.
But that deal was annulled by the Allahabad High Court on the grounds that the state had no authority to sell the assets of the company when it was under liquidation by the orders of the High Court. The latter ruled that the assets be re-auctioned, this time through the formation of an asset sale committee, thus paving the way for the present expression of interest, which is to be followed by bidding.
The UP State Cement Corporation Ltd was incorporated in 1972 and had its production units at three sites: Dalla, Chunar, and Chur in UP. It had an installed capacity of 1.68Mta of cement.
The plant had been closed down for a number of years and the Uttar Pradesh government even stopped paying salaries, which led to some reported deaths from hunger. But an earlier deal between Grasim and the UP government was then opposed by Lafarge. Ultimately the High Court cancelled the deal. Grasim has chalked out a plan for investment of about Rs 400 crore (US$87m) for a new plant after scrapping the present one.