Days after completing its $6.5 billion acquisition of Ambuja Cements and ACC, The Adani Group has pledged its whole $13 billion interest in the two companies.
Details about Adani Group proposes a $13 billion stake in ACC and Ambuja Cements
The billionaire Gautam Adani-led company has pledged to the Hong Kong Branch of Deutsche Bank AG its 63.15 percent stake in Ambuja Cements and 56.7 percent stake in ACC (of which 50 percent is controlled by Ambuja), according to regulatory updates on Tuesday, September 20, 2022.
According to Adani Group, which has already laid out plans to expand the cement manufacturing capacity to 140 million tonnes in the next five years, this is “for the advantage of certain lenders and other financial partners.”
Tuesday’s BSE closing prices for Ambuja Cements shares were 574.10 and for ACC Ltd they were 2,725.70.
Through a Mauritius-based SPV called Endeavour Trade & Investment Ltd (ETIL), which is owned by Xcent Trade and Investment Ltd, Adani purchased the two businesses (XTIL).
For the “issuance of $535,000,000 12.0739% Senior Secured Notes due 2024,” both had “availed certain financial indebtedness” for Deutsche Bank, and in accordance with the terms & circumstances stated, ETIL & Xcent have “made a charge over 100% of the shares in favor of Deutsche Bank AG.”
The completion of the $6.5 billion acquisition of Ambuja Cements & ACC, which includes the buyout of Swiss company Holcim’s shareholding in the two companies and subsequent open offers to minority shareholders, was announced last week by Adani Group.
This week, Gautam Adani announced in a speech to shareholders that his company intended to increase its capacity for producing cement and become the most successful producer in the nation.
He predicted that the government’s push to build infrastructure and India’s record-breaking economic development would lead to a huge margin expansion and a multifold increase in cement demand.
The ports-to-energy conglomerate has overnight become the second-largest cement manufacturer in the nation, according to a speech given by the founder and chairman of the Adani Group on September 17 at an event to celebrate the completion of the acquisition.
He described the acquisition as historic and said that it was completed in a record-breaking 4 months, making it the largest inbound M&A transaction to ever take place in India in the infrastructure & materials sector.
The Adani Group’s promoters have previously pledged their ownership stakes in a number of group firms to help finance the rapid growth of several business sectors and to obtain money for corporate objectives. The promoters pledged a 25.33 percent stake in Adani Power, a 13.07 percent stake in Adani Ports and Special Economic Zone, a 5.90 percent stake in Adani Transmission, a 3.79 percent stake in Adani Enterprises, and a 2.19 percent stake in Adani Green Energy, according to data that was made available by Ace Equity and the BSE.
As of September 20, the Adani Group, including Ambuja and ACC, has a combined market capitalization of Rs. 22.93 lakh crore, surpassing Tata Group to become India’s most valuable business conglomerate.