Emami Group on Thursday announced that it has entered into a binding agreement with Nuvoco Vistas Corporation Ltd to sell 100 per cent equity in its cement business for an enterprise value of Rs 5,500 crore, a deal that will significantly pare the conglomerate's debt.

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The promoters of the Kolkata-headquartered Emami, however, had sought a much higher valuation.

The group level debt stands at about Rs 2,600 crore.

"This transaction is an important step in our Group's stated objective of becoming debt-free, and with this transaction, we will substantially achieve this objective," Emami Group Director Manish Goenka said.

"We strongly believe that the Nuvoco and Nirma Group will continue from here and strengthen the business further," Emami Group Director Aditya Agarwal said.

Aditya Birla flagship company UltraTech, Nuvoco Vistas (formerly Nirma Cement), a LafargeHolcim company and Star Cement were in the race for taking over the 8-million tonne capacity cement business of Emami Group.

Emami Cement, which operates in West Bengal, Odisha, Chhattisgarh and Bihar, has one integrated plant and three grinding units.

The deal is subject to customary approvals and is expected to be complete in the next three-four months.

"Emami Cement will enable us to take our cement business to the next level," Nuvoco Chairman Hiren Patel said.

"This will bring Nuvoco's total cement capacity in eastern, northern and western India to 23.5 million tonnes," it said in a statement.

First Published:Feb 6, 2020 8:46 PM IST