Orient Cement, part of the $1.6 bn CK Birla Group has emerged as the front-runner to buy out the majority stake of Manoj Gaur led Jaiprakash Associates in its subsidiary Bhillai Jaypee Cement, multiple sources familiar with ongoing negotiations told ET NOW on the condition of anonymity. ET NOW was the first to report the development.

"Due diligence is over and the proposed transaction is at an advanced stage and has entered the final leg. The board of Jaiprakash Associates will meet shortly to consider the deal which is likely to be struck at an enterprise value of around Rs 1500 crores," said one of the sources cited above.

Bhillai Jaypee Cement operates as a 74:26 JV between Jaiprakash Associates & SAIL and has a capacity of 2.1 million tonnes per annum( mtpa) . It operates a clinkerization unit at Satna, Madhya Pradesh and a split grinding unit at Bhilai, Chhattisgarh.

On Wednesday, Jaiprakash Associates announced that a meeting of the board of directors would be held on 6th October regarding recommendations of the restructuring committee and the progress on the various divestment initiatives of the company.

" This deal is part of the ongoing debt-reduction drive of Jaiprakash Associates. When it comes to Orient Cement, it will get access to markets in Central and East India. They are currently mainly present in South India and want to ramp up their capacity," said another source cited above. Orient Cement has a total capacity of 8 mtpa and plans to reach 15 mtpa by 2020,according to the company website.

ET NOW is awaiting email responses from Jaiprakash Associates and Orient Cement on the proposed transaction.