The Hindu Business Line : Blackstone to invest Rs 615 cr for stake in Nagarjuna Const

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Blackstone to invest Rs 615 cr for stake in Nagarjuna Const

Total share of FIIs in equity will go up to 44%

Our Bureau

Hyderabad, Aug. 28 The Blackstone Group of the US will invest Rs 615 crore into the Hyderabad-based Nagarjuna Construction Company Ltd (NCCL) in a preferential offer.

The board of directors of the Rs 2,900-crore company accorded in-principle approval for issue of 2.02 crore equity shares of Rs 2 each at a premium of Rs 200.50 and 91.11 crore warrants of Rs 225 a warrant each warrant convertible into one equity share of Rs 2 each at a premium of Rs 223, aggregating to about Rs 615 crore.

“The investment by Blackstone will be equivalent to 12.2 per cent of the equity (fully diluted basis). The total share of FIIs in equity will go up to 44 per cent from current 32 per cent,” Mr Y.D. Murthy, Senior Vice-President (Finance), Nagarjuna Constructions, told Business Line here.

The promoters now have 24.1 per cent stake.

“However, this might come down to 22.2 per cent after the conversion of their warrants,” Mr Murthy said. The total capital base of the firm would go up to Rs 48 crore from Rs 41.7 crore now,” he added.

The issue would be made to Blackstone GPV Capital Partners Mauritius V-A Ltd, Blackstone GPV Capital Partners (Mauritius) V-H Ltd, and Blackstone FP Capital Partners (Mauritius) V FII Ltd.

The company would use the proceeds of preferential offer primarily to fund build-operate-transfer (BOT) projects. “About 60 per cent of the funds will be used for funding projects in power sector and the remaining will go to working capital and other long-term funding needs,” Mr Murthy said.

EGM

An extraordinary general meeting of the members of the company would be convened on September 24 for obtaining the approval for the deal, an NCCL release said.

Commenting on the deal, Mr A. Ranga Raju, Managing Director, NCCL, stated, “This investment will not only allow us to make additional investments in public-private infrastructure projects, but will also expand our capital base.”

Mr Akhil Gupta, Chairman and Managing Director of Blackstone Advisors India Private Ltd, stated, “We look forward to supporting the continued growth of the company as it delivers on its long-term growth plan.”

On the BSE, the company’s stock closed today at Rs 197.55, up by Rs 2.80 or 1.44 per cent, with an intraday high of Rs 200.70 and low of Rs 193.

Nagarjuna Construction’s net profit increased by over 14 per cent to Rs 36.03 crore in the first quarter ended June 30, 2007, against Rs 31.38 crore in the previous quarter of the last fiscal. The turnover grew by 17 per cent at Rs 763 crore (Rs 653 crore).