The Bangur family controlled Graphite India has picked up a 46 per cent stake in the US-based unlisted graphene sheet producer, General Graphene Corporation, at a cost of approximately Rs 135 crore ($18.595 million).
The all-cash deal was made through Graphite India’s wholly-owned Netherlands-based subsidiary, Graphite International. Investments will be made in tranches based on the “achievement of agreed milestones” in establishing manufacturing facilities (for commercial production of graphene sheets).
Graphene is a two-dimensional sheet of pure carbon structure in a single layer of carbon atoms. Some of the potential applications include electronics, including touch screens, medicines and bio-electric sensory devices, composite materials, energy storage and aerospace.
“Graphite International BV has signed a definitive agreement for investment of up to $18.595 million in multiple tranches in cash in General Graphene Corporation, which, on an as converted basis to common stock on a fully diluted basis, would constitute approximately 46 per cent stake,” Graphite India said in release to the bourses.
Lodha Capital Markets was the financial advisor to the deal. Kolkata-headquartered Graphite India is one of the largest manufacturers and suppliers of graphite electrodes -- used primarily in making steel through the electric arc furnace route -- as well as carbon and graphite speciality products in India.
The acquisition is expected to help the company enter the high technology business.
Strong Numbers
Graphite India reported a strong set of numbers in Q1 (April to June period) of this fiscal due primarily to “strong momentum because of rising steel production” and “higher realisations”.
The company reported an over 400 per cent jump in net sales to the tune of Rs 1,965 crore in Q1FY19, as compared to the Rs 390 crore it reported in the year-ago period.
Net profit surged by 3,090 per cent to Rs 957 crore (as against Rs 30 crore) during the quarter under review. In a statement post the Q1 results, company Chairman, K.K. Bangur, said the strong sector momentum continued in the new fiscal, with steel production witnessing a near 5.6 per cent growth.
“New electric arc furnaces are becoming operational as they replace certain archaic blast furnace capacities in order to curb pollution,” he added.