RInfra to sell 5.8MT cement business, monetise 8,800 cr projects

New Delhi: In a strategic move to unlock value, Reliance Infrastructure (RInfra) Wednesday said it will sell its 5.8 MTPA cement business and monetise 11 road projects worth Rs 8,800 crore, making the defence sector as primary driver of the company's growth.

The Anil Ambani-led firm said its board after conducting strategic review of businesses, approved that defence sector "will be primary driver" for growth and gave nod for "disposal of cement business" for which 7 potential buyers have been short-listed.

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"The 5.8 million tonnes per annum (MTPA) cement business and related assets of the company will be disposed off through a formal process.

The company has short-listed seven potential buyers from a total of 15 parties that submitted preliminary Expressions of Interest. The Due Diligence process has been commenced. Further announcements will be made at the appropriate stage," the company said in a statement.

It said investment of Rs 8,800 crore made by the company in its 100 percent owned roads business, comprising 11 revenue generating projects of approx 1,000 km across 7 states, will be appropriately monetised.

"The Board of Directors of the company today reviewed the progress on proposed acquisition of Pipavav Defence & Offshore Engineering Co Ltd as well as significant business opportunities across the Defence sector," the company said.

The Board noted that new high growth opportunities in the defence sector, arising from the Make in India and Skill India policies of Prime Minister Narendra Modi, serve vital national priorities with features like relatively lower capital intensity, lower gestation period, higher job creation and potential for superior return on equity, among others.

"Accordingly, in the interests of achieving the highest overall shareholder value for the benefit of its millions of retail and institutional domestic and international investors of the Company, the Board at a meeting held today took the ... decisions," it said.

RInfra expects to complete the acquisition process of Pipavav defence and offshore company this fiscal itself post which it will be renamed as Reliance Defence and Engineering.

In the biggest deal in the defence sector, billionaire RInfra in March this year had announced acquisition of controlling stake in Pipavav Defence and Offshore Engineering for up to Rs 2,082.3 crore.

Pipavav Defence houses India's largest dry dock facility to build warships and other naval vessels.

The Maharashtra Government has allotted 290 acres of land at Mihan near Nagpur for the development of India's first smart city for the defence sector, known as Dhirubhai Ambani Aerospace Park (DAAP).

RInfra is one of the largest companies in infrastructure space.

Shares of the company closed at Rs 399.05 apiece on the BSE, up 1.97 percent.