With an aim to be a market leader in India’s cement industry, India’s richest man Gautam Adani plans to engage Sheikh Tahnoon bin Zayed Al Nahyan of the United Arab Emirates’ ruling family and other investment groups in the Middle East to raise funds for acquisition of Ambuja and ACC cement companies.
Ambuja cement, a publicly traded firm, is a market leader in India’s cement industry with an annual production capacity of 31 million metric tonnes from its six integrated manufacturing plants and eight cement grinding units.
ACC Ltd, which is also a publicly traded firm, is a subsidiary of Ambuja.
Switzerland based Holcim controls 63.1 per cent of Ambuja, and it is considering the sale of its stake as part of its ongoing sale of non-core assets.
Adani, JSW and the existing market leader Ultratech are competing to acquire the firms.
Continuing its acquisition spree, the Adani group plans a unique acquisition and financing structure for the potential $7.5-billion buyout of the two cement companies.
According to a report by The Economic Times, Adani may float a group entity based in Dubai as the principal vehicle for the transaction by capitalizing an SPV under it to the tune of $3 billion.
Both the Adani family and Middle Eastern investor group may contribute this amount as equity.
Reportedly, this SPV would float another SPV with $3 billion equity and around $4.5 billion in funding from global banks such as Deutsche Bank, Barclays and Standard Chartered Bank.