The Adani Group has pledged its entire $13 billion stake in Ambuja Cements and ACC just days after the completion of the $6.5 billion acquisition of the two companies.
Under Tuesday’s regulations, the billionaire Gautam Adani-led group has entrusted its 63.15 percent stake in Ambuja Cements and 56.7 percent in ACC (50 percent of which is owned by Ambuja) to the Hong Kong Branch of Deutsche Bank AG.
This is “to the benefit of certain lenders and other financial parties,” said Adani Group, which now has plans to double cement production capacity to 140 million tons over the next five years.
Ambuja Cements shares closed on Tuesday at Rs 574.10 each on BSE and ACC Ltd shares settled at Rs 2,725.70.
Adani acquired the two companies through a Mauritius-based SPV Endeavor Trade and Investment Ltd (ETIL), which is owned by Xcent Trade and Investment Ltd (XTIL).
Both had “certain financial indebtedness” to Deutsche Bank for “issuance of 535,000,000 USD 12.0739 percent Senior Secured Notes due 2024” and subject to the terms set forth, ETIL and Xcent have “an expense of more than 100 percent of the shares in favor of Deutsche Bank AG”.
Last week, Adani Group announced the closing of its $6.5 billion acquisition of Ambuja Cements and ACC, including the buyout of Swiss major Holcim’s stake in the two companies and subsequent open offers to minority shareholders.
Addressing shareholders earlier this week, Gautam Adani had said his group plans to double its cement production capacity and become the country’s most profitable manufacturer.
He saw a multiple increase in cement demand in India due to record-breaking economic growth and government pressure to create infrastructure, which will deliver significant margin expansion.
Speaking at an event to mark the completion of the acquisition on September 17, the founder and chairman of the Adani Group said the port-to-energy conglomerate has become the country’s second-largest cement producer in one fell swoop.
He called the acquisition historic and said the buyout is India’s largest-ever inbound M&A transaction in infrastructure and materials, closing in a record 4 months.
“Our entry into this business comes at a time when India is on the brink of one of the biggest economic booms in the modern world,” he said in the speech.
He cited the reasons for the foray into the cement sector and said that although India is the world’s second largest cement producer, its per capita consumption is only 250 kg, compared to 1,600 kg in China.
“This is almost 7x the headroom for growth.” Adani Group’s competency in driving operational efficiencies will result in “significant margin expansion to become the country’s most profitable cement manufacturer,” he said.
“And we expect to go from the current capacity of 70 million tons to 140 million tons in the next 5 years.” The group is the world’s largest solar energy company and has invested $70 billion in clean energy, including green hydrogen, he said.
Adani Group is the country’s largest airport operator with 25 percent of passenger traffic and 40 percent of air cargo. It is the largest port and logistics company in the country with a market share of 30 percent.
(This story was not edited by The Switzerland Times staff and was generated automatically Platforms.)