Swiss cement giant Holcim has decided to take complete control of Ambuja Cements India (ACIL), the local company through which it controls ACC, India’s largest cement major. Holcim will buy 11% from Ambuja Cement (ACL), formerly Gujarat Ambuja, for Rs 589 crore. Ambuja Cement, which created ACIL in 2000 and offered stakes to the Government of Singapore and American International Group (AIG) in what was then the country’s largest private equity transaction, will now completely exit the company.
The move will enable Holcim to own 100% of an entity that owns stakes in two of India’s largest cement players. ACIL controls 42.88% in ACC, India’s largest cement maker with a 13% market share. ACIL also owns 9.9% in Ambuja Cement, the third-biggest cement-maker with a 10% market share. Holcim directly owns 36% in Ambuja Cement.
In 1999, Ambuja Cement (ACL) stunned corporate India by buying the Tata Group’s 14% stake in ACC. The audacious move clearly signaled the company’s ambition in dominating the cement market. Two years later, in order to lessen the cost of the acquisition, Ambuja transferred its 14.5% stake in ACC to Ambuja Cement India (ACIL) and brought in the Government of Singapore and AIG as investors.
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Reliance Industries Ltd (RIL) is set to acquire majority stake in an oil block in Peru. The company is understood to have recently inked an agreement with Pan Andean for acquiring stake in Block 141 in Peru. The company is presently seeking necessary approvals from authorities in Peru. Pan Andean Resources explores and produces oil and gas in South America and the Gulf of Mexico.
Indications are that RIL is likely to acquire 90 per cent stake. Block 141 in the Lake Titicaca area of Peru is a large oil exploration play. RIL has been pursuing contracts for farm-in activities in two oil blocks in Peru. (Under Farm In practice, a company does not acquire the property directly, but rather develops the oil and natural gas properties by taking participating interest in the block)
Reliance already has 11 overseas oil and gas assets, with the latest being a block in Australia. With the Peru block, the number would go up to 12. The company is further looking at opportunities in Africa, Latin America and West Asia.
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Tata Power (TPC) has announced the financial closure of its 4,000 MW ultra mega power project (UMPP) at Mundra in Gujarat. The financial agreements have been signed under the company’s special purpose vehicle (SPV), Coastal Gujarat Power Ltd (CGPL).
The project cost is estimated at Rs 17,000 crore. The project is financed through equity of Rs 4,250 crore, external commercial borrowings (ECB) of around $1.8 billion (about Rs 7,200 crore) and rupee loans of up to Rs 5,550 crore. SBI Caps are the financial advisors and mandated lead arranger for rupee loans.
The first of the five units is expected to be commissioned by September 2011 and the entire plant is expected to be commissioned by end-2012. The project consists of 5 units, each of 800 MW which will generate saleable power of 3800 MW to be supplied to five states namely Gujarat, Maharashtra, Rajasthan, Haryana and Punjab.
The signing of the financing agreements for Mundra UMPP is an important milestone. The terms of debt financing provides TPC a long tenure of loans, supporting its competitive bid price assumptions. The good response demonstrates the faith of the lenders in its execution capabilities and expertise to complete the project in time.
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