NEW DELHI Jaiprakash Associates Ltd (JAIA.NS) has agreed to sell its 74 percent stake in Bokaro Jaypee Cement to Dalmia Cement (Bharat) Ltd for 6.9 billion rupees, as the group seeks to cut its growing debts.
Indian power and infrastructures companies are suffering under the strain of large debts, a struggle to get projects approved and a slowdown in the Indian economy in recent months.
Jaiprakash and its subsidiaries have total debts of 620 billion rupees, up from between 550 billion and 560 billion in September, Executive Chairman Manoj Gaur told CNBC TV 18. The company plans to cut its debts by 250 billion rupees by the end of March 2015 through more asset sales, he added.
"The intention is to give less and less pain to the bankers and remain creditworthy in the eyes of the bankers," Gaur told the TV channel.
The Bokaro Jaypee Cement deal is subject to the approval of Steel Authority of India Ltd (SAIL.NS), its joint venture partner, Jaiprakash said on Monday after a board meeting.
Jaiprakash and its subsidiaries have already made a number of disposals in recent months.
Jaiprakash Power Ventures agreed to sell two power plants earlier in March to an Abu Dhabi-led consortium for $1.6 billion.
The company sold its cement plant in Gujarat state to UltraTech Cement last year.
Jaiprakash, founded by Jaiprakash Gaur, is known in India as the builder behind the country's only Formula One track.
(Reporting by Tommy Wilkes; Editing by David Holmes)