Tube Investments of India completes acquisition; CG Power locks in at upper circuit

Tube Investments of India (TII) announced that it has completed the acquisition of CG Power & Industrial Solutions. As a result, on Friday, the shares of CG Power locked in at its upper circuit of Rs 41.15 per share.

After the necessary approvals, the much-focussed acquisition of CG Power by TII was finally reported to be completed. TII acquired 64,25,23,365 equity shares of a face value Rs 2 each and 17,52,33,645 warrants and thus, subsequently resulted in the controlling of CG Power & Industrial Solutions Limited. Hence, TII now has a majority controlling stake of 50.62 per cent in CG Power. With the conversion of warrants into equities, TII’s stake in CG Power will increase to 51.61 per cent.

Murugappa Group’s TII also reported in a filing to the bourses that the company i.e. TII has been classified as the ‘promoter’ of CG Power and the board of directors of CG Power has also been reconstituted with Vellayan Subbiah, as its chairman and Natarajan Srinivasan, being appointed as the new Managing Director.

The takeover was followed as lenders to CG Power agreed to a one-time loan restructuring, under which, lenders are to be paid an upfront amount of Rs 650 crore and also, a debt of Rs 200 crore would be converted into non-convertible debentures having a five-year tenure. CG Power has a total debt of Rs 2,161 crore, out of which, a consortium of 14 banks agreed to a haircut of Rs 1,100 crore and restructured the remaining.

On Friday, the stock of TII was trading at Rs 819.40 per share, up by 0.53 per cent or Rs 4.35 per share.