Hyderabad-based Prism Johnson Ltd. has approved the transfer of certain limestone-bearing land parcels in Kalvatla and Kotapadu villages in Andhra Pradesh aggregating to 1,420.72 acres to The Ramco Cements Ltd.
Terms and conditions for the definitive agreements that will be executed with The Ramco Cements have been approved by Prism Johnson's board on Saturday, it said in an exchange filing.
Additionally, Prism Johnson will also transfer a mining lease granted by the Government of Andhra Pradesh over an area of 663.46 hectares in the above-mentioned villages to The Ramco Cements.
The total consideration for this transaction was not disclosed by either company. Prism Johnson said that it had purchased these limestone-bearing land parcels in these Andhra villages to set up a greenfield cement manufacturing plant. However, it has decided to transfer these land parcels as well as the mining lease as their 'current priorities' do not warrant an investment in setting up the plant.
The transaction is likely to be completed by July 31. Prism Cement contributed 44 percent to Prism Johnson's consolidated revenue in financial year 2023.
In an investor presentation in May, Prism Johnson mentioned that its current net debt stood at Rs 1,149 crore at the end of financial year 2023, down from Rs 1,253 crore in financial year 2022. Net debt-to-EBITDA ratio, however, had increased to 2.6 times from 2 times earlier.
For financial year 2024, Prism Johnson has debt repayment obligations worth Rs 409 crore, of which it has already prepaid Rs 35 crore as of May. Ramco Cements said that it is constantly on the lookout for limestone reserves for its cement manufacturing operations and it has managed to secure these from Prism Johnson.
