Adani in Discussions with Middle East Investment Groups for ACC, Ambuja Buy
Billionaire businessman Gautam Adani is in discussions with investment groups and funds from the Middle East, including members of the family of Sheikh Tahnoon bin Zayed Al Nahyan, for financing support of up to $2 billion for the acquisition of the listed ACC and Ambuja, Holcim’s twin cement assets in India. This is part of a unique acquisition and financing structure the Ahmedabad- based conglomerate is putting in place for the potential $7.5-billion buyout of the two listed cement companies, cumulatively the second largest in India that ranks next only to China in both global output and consumption. ACC is also India’s oldest manufacturer of the primary building material, and is a step-down subsidiary of Ambuja Cements that’s directly controlled by the European cement major. Sheikh Tahnoon bin Zayed Al Nahyan belongs to the ruling family of the United Arab Emirates. Adani is likely to use a group entity based in Dubai, as the principal vehicle for the transaction, people privy to the plans told ET. This entity will float a special purpose vehicle (SPV) where the Adani family, as promoters, will infuse $1.25 billion-$1.5 billion as equity. A similar amount, likely in the form of structured equity, is expected from the Middle East investor group the Adani family is engaged with. Together, this vehicle will be capitalised to the tune of $3 billion. This approximately $3 billion in turn will become the equity of another drop- down SPV in which global banks, such Deutsche Bank, Barclays and Standard Chartered Bank, are expected to lead the funding of another $4.5 billion as acquisition financing. Adani is expected to provide letter of comfort to the banks as well if the need arises. Besides the three, other banks will join the financing consortium subsequently for share financing. The Adani Group has been planning to enter the cement business and formed a separate wholly owned subsidiary of AEL, Adani Cement Industries, in June 2021. Other than Gujarat, where the plans were to use fly ash for cement, the group has been looking at a 5-MTPA cement plant in Maharashtra with an initial investment of up to Rs 1,000 crore, next to the JSW unit in Dolvi. Interestingly, Adani Enterprises Ltd. has another cement arm Adani Cementation Ltd that has been planning to build an integrated facility in Gujarat. It has also been awarded a captive jetty in Raigarh, Maharashtra. An Ambuja-ACC buyout would catapult the buyer to the number two position in the sector with a combined capacity of 67MTPA.
Tags : Adani Middle East Investment Groups ACC Ambuja Buy Billionaire businessman Gautam Adani Sheikh Tahnoon bin Zayed Al Nahyan