The Hindu Business Line : Rain Calcining taking debt-equity route for US co buy

Hyderabad June 4 To mobilise funds for its recently announced acquisition of US-based CII Carbon, LLC, Hyderabad-based Rain Calcining Ltd will adopt a debt-cum-equity route.

"We will take a combination of equity-cum-debt route to mobilise funds for the acquisition. While about $120 million would be raised through equity, $480 million would be sourced from debt," Mr T. Srinivasa Rao, Vice-President (Finance), told Business Line here.

Rain/CII Holdings, Inc., a subsidiary of Rain Calcining, had on June 1 entered into a definitive agreement to acquire all of the outstanding equity of CII Carbon, LLC for a cash purchase price of $595 million.

The company would raise equity through internal accruals and cash.

The debt would be raised from the `target' company itself, he said.

"We are rushing through the procedural formalities and the entire process will be completed within 15 days to one month," Mr Rao said.

The acquisition would position the company as the largest producer of Calcined Petroleum Coke, a raw material used in the production of aluminium and titanium dioxide.

"The combined capacity of the two entities would be 2.44 million tonnes with eight plants in the US and India.

"The single most advantage for Rain Calcining would be the operational and production foothold in the US as CII Carbon has seven plants in the US," he said.

Apart from making Rain Calcining the number one company in the world, the acquisition would also make it the world's top low-cost producer.

Further, CII Carbon has many long-term contracts with the US refineries.

"There are many big customers and our raw material would enjoy a wider reach in the US market," Mr Rao said.

Back home, Rain Calcining, which currently runs a plant in Visakhapatnam, would be adding one more plant soon.

"We are setting up one more plant in Visakhapatnam which would be operational in next 18 months," he said.

The company would invest $70 million in two phases of the plant.

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