A strategic change is underway at Aditya Birla Real Estate Ltd (ABREL). The Board of Directors approved an RS 3 498 crore agreement to give in its unit of paste and paper to Lalkuan, Uttarakhand, to ITC Limited – marking a decisive pivot with its main objective: real estate. The sale comes while the conglomerate moves to unlock the value and sharpen its commercial priorities in the midst of an aggressive expansion.
The agreement between Abrel and ITC implies a flat -rate consideration of RS 3,498 crosses, subject to certain adjustments and depends on regulatory approvals, including those of the Competition Commission of India and the shareholders of Abrel.
In a press release published on March 31, Abrel said that disinvestment was part of a value unlocking strategy and will allow the company to continue its growth in its real estate activity.
RK Dalmia, Director General of Abrel, said: “The disinvestment of the paste and paper company by Abrel is a choice of strategic portfolio and unlocks the value of ABREL shareholders. The company has embarked on a phase of transformational growth, and this decision will further accelerate its emphasis on real estate to lead to the creation of a sustained value. ”
He added: “Over the years, the CPP has become synonymous with solid performance and high sustainability standards.
JM Financial Limited was the exclusive financial advisor while AZB & Partners provided legal advisers to Abrel on the transaction.
For ITC, a market leader with more than a million tonnes per year of paper production capacity in four states, acquisition marks a strategic expansion. He was in the running with the paperwork of the west coast to acquire pulp and Century paper.
For the Aditya Birla group, the sale aligned with its wider strategy for capital reallow. The conglomerate has recently extended to sectors at high capex such as paintings, retail sales of jewelry and real estate – requiring sharper financial maneuvers to maintain its diversified interests in metals, cement, retail, telecommunications and financial services.
