Jaypee has been trying to reduce debt after State Bank of India initiated insolvency proceedings against it for failing to settle dues of ₹6,892 crore.

It has signed a binding framework agreement with Dalmia to sell its cement, clinker, and power plants, which have a cement capacity of 9.4 million tonnes per annum (mtpa), clinker capacity of 6.7 mt, and thermal power capacity of 280MW. “JAL, the flagship firm, is taking steps to reduce debt and repay lenders to meet commitments on a proactive basis,” said Manoj Gaur, executive chairman of JAL. “In this regard, JAL divested over 20 mtpa cement capacity in favour of UltraTech Cement in 2014 and 2017, while selling a controlling stake of over 2 mtpa cement capacity to Dalmia in 2015.”

To repay the loans and concentrate on its other core areas of business, JAL has decided to divest its entire cement business, Gaur added. “With the sale of cement capacity of 9.4 mtpa, we demonstrated its creditable working. JAL will further cement its credentials of being a trustworthy organization in the infrastructure segment in times to come,” he said. The company’s assets are located in Madhya Pradesh, Uttar Pradesh and Chhattisgarh.

The company defaulted on ₹3,869 crore worth of loans and foreign currency convertible bonds due on 30 November to both public and private lenders.

On Monday, JAL shares hit an upper circuit of 10%. The stock ended trading at ₹11.74.