The Hindu Business Line : Rain Commodities arm in pact with Great Lakes Income Fund

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Hyderabad Feb. 5 Rain Commodities (USA), a wholly owned subsidiary of Rain Commodities Ltd (RCL), entered into an agreement today with Great Lakes Carbon Income Fund, Toronto, Canada to acquire majority stake and certain assets.

Accordingly, it will pick 73.56 per cent of the fund's ownership interest in GLC Carbon USA and certain unsecured subordinated notes of Huron Carbon ULC, a wholly owned subsidiary of GLC Carbon.

As per the terms of agreement, the acquisition is for an aggregate purchase price of Canadian $437 million in cash. On a fully diluted basis, including Rain Commodities (USA) Inc.'s existing interest in GLC Carbon USA and the assumption of GLC Carbon USA's third party debt, the enterprise value of the transaction is approximately Canadian $767 million.

Unit holders' meeting

The proposed transaction, which is subject to approval by two-thirds of the votes represented at a unit holders' meeting, regulatory approvals and other customary closing conditions, is expected to close at the end of the first quarter of 2007.

The Fund has set February 19, 2007 as the record date for a special meeting of unit holders to approve the terms of the proposed transaction and the wind up of the Fund.

Great Lakes Carbon Income Fund is a trust established to hold indirectly the securities of GLC Carbon USA Inc. The Fund currently holds an indirect 73.56 per cent interest in GLC Carbon USA Inc.

GLC Carbon USA is the world's largest producer of calcined petroleum coke (CPC).

Existing holding

Rain Commodities (USA) Inc currently holds a 20.23 per cent ownership interest in GLC Carbon USA, through its purchase of AIP / GLC Holdings, LLC (subsequently renamed Rain / GLC Holdings, LLC), from American Industrial Partners Capital Fund II, L.P. on March 2, 2006.

Rain Calcining Ltd is Asia's largest producer of anode and industrial grade CPC. Considering the growing demand for CPC in the Indian market, the company has also decided to set-up a greenfield CPC plant with a capacity of 240,000 tonnes per annum, along with a co-generation power plant of 25 MW in Visakhapatnam, Andhra Pradesh, either directly or through its wholly owned subsidiaries, in the next 18 months.