JP Associates Mergers – Impact Analysis

Jai Prakash Associates [JPA] proposes to merge the following companies with itself wef April 1, 2008.

Jaypee Hotels Ltd (existing 72% stake, owns Jaypee Palace Hotel (Agra), Jaypee Vasant Continental and Jaypee Siddharth Hotel (New Delhi))

Jaypee Cement Ltd (existing 100% stake)

Gujarat Anjan Cement Ltd (existing 100% stake, setting up ~ 2.4 mtpa cement capacity in Gujarat by FY10)

Jaiprakash Enterprises Ltd (owns 15% stake in Jaypee Power Ventures. Jaypee Power Ventures in turn owns power assets of Vishnuprayag hydro, Siddhie and Karcham Wangtoo (55%)). (Outstanding share capital and stake held by JPA is not known)

The impact of merging three subsidiaries Jaypee Hotels, Jaypee Cements and Gujarat Anjan Cement with JPA is negligible. Equity share capital is diluted by 1.3%, JPA’s standalone PAT increases by 0.8%. We await details of the outstanding share capital and stake held by JPA in Jaiprakash Enterprises to assess its impact on JPA.