Century Textiles is in advanced talks to sell its paper business to JK Paper in a deal valuing the division at Rs. 5,000 crore by enterprise value.
August 1, 2017
As per various media reports and industry sources, Century Textiles and Industries Ltd (CTIL), a part of the B.K. Birla Group, is in advanced talks to sell its paper business to JK Paper Ltd in a deal valuing the paper division at close to Rs 5,000 crore by enterprise value. The decision to sell the paper business is part of the group’s overall strategy to realign its businesses with those of the Aditya Birla Group, led by Kumar Mangalam Birla, and a sale has been in the works for over two years, the people said on condition of anonymity.
The company had evaluated a proposed sale to ITC Ltd in 2015 but differences over valuation blocked the transaction. The company’s pulp and paper division, called Century Pulp and Paper, was established in 1984 at Lalkua, near Nainital in the state of Uttarakhand. Its second paper unit, based on bagasse manufacturing, is located adjacent to the existing pulp and paper plant at Lalkua. It was established in 1995. The company also has a prime-grade tissue paper plant in Lalkua.
A large portion of the proceeds will go towards retiring the debt of CTIL, which was Rs4,715.21 crore in 2015-16, marginally down from Rs4,830.91 crore in the previous year.
JK Paper is one of the largest producers of paper products in India with a combined capacity of 455,000 tonnes per annum and it also was till recently in talks with Ballarpur Industries Ltd to acquire two units at Ballarpur and Asthi in Maharashtra.