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Chennai-based Murugappa Group's Tube Investments of India (TII) Ltd plans to invest another ₹100 crore in its proposed acquisition of CG Power & Industrial Solutions Ltd.
The added investment is being proposed to meet the additional funding requirements of CG Power subject to necessary corporate authorisations and statutory approvals, TII said in its filing to stock exchanges.
TII, on August 7, had announced an agreement to pick up a majority stake in CG Power for ₹700 crore.
On Wednesday, the TII board approved an additional investment in 6,87,28,522 equity shares of CG Power to be issued to TII at ₹14.55 apiece on a preferential issue basis. This is in addition to the ₹700 crore already committed in the equity shares and share warrants of CG Power, which was entangled in an alleged financial fraud last year.
The ₹100 crore investment will be in the form of cash consideration by way of investment through subscription in the equity shares of CG Power.
Expanded stake
After subscription to the equity capital including additional investment and conversion of warrants, the shareholding of TII will be 88,64,85,532 equity shares representing about 58.58 per cent of the expanded issued and subscribed share capital of CG Power.
The investment and issue and allotment of equity shares on a preferential basis are subject to the approval of shareholders of CG Power and the Competition Commission of India.
TII reiterated again that its operational, financial and governance capabilities and experience will help remove the present difficulties and hardships of CG Power, which is also an engineering company, and facilitate create value creation for both TII and CG Power.
TII has been the sole bidder, with no new suitors coming forward under the Swiss Challenge method, which is an open bid process favouring the highest offer.
The 83-year old ₹3169 crore CG Power has been engaged in the industrial and power sectors. It has 13 manufacturing facilities and employs over 3,000 people directly and 8,000 people indirectly.
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