Adani to infuse $3 bn in equity for Holcim deal
MUMBAI/NEW DELHI: The Adani family plans to bring in $3 billion as promoter equity for its $10.5 billion buyout of Holcim Ltd’s stake in ACC Ltd and Ambuja Cements Ltd, while banks will finance the rest, two people aware of the financing agreement said.
On May 15, the Adani family said the acquisition would be funded through an offshore special purpose vehicle, which will acquire the Swiss company’s entire stake in two of India’s leading cement companies.
“The said offshore entity has been created in Mauritius in which the promoters plan to infuse $3 billion as equity,” said one of the two people cited above, both of whom spoke on condition of anonymity.
“The acquisition is fully funded by way of approved commitments from our relationship banks - Barclays, Deutsche Bank and Standard Chartered Bank and equity infusion by the Adani Family,” Adani said on Sunday.
Some of the promoter equity is expected to be raised from a prominent sovereign wealth fund based in the Middle East, the first person said, adding, “the remaining portion will be funded via debt which will be raised by the promoters in their personal capacity.”
“A clutch of foreign banks will fund close to $7 billion in debt, which will initially be raised as a term loan, against which lenders will have a charge on the assets,” the second person said, adding, “the debt portion will be eventually refinanced via bonds.”
On Monday, the Adani family announced separate open offers to the public shareholders of the two cement companies to acquire an additional 26% stake in them. Adani has offered to buy ACC shares at ₹2,300 apiece and Ambuja shares at ₹385, spending a total of ₹31,139.5 crore if the open offer is fully subscribed.
On Monday, shares of ACC and Ambuja closed 3.7% and 2.59% higher at ₹2194.90 and ₹368.10, respectively.
In an analysts’ call on Monday, Jan Jenisch, chief executive officer of Holcim, the world’s largest cement maker, said the group does not expect any capital gains tax liability from the 6.4 billion swiss francs it will receive from the sale.