Ambuja Cements seeks shareholders' nod for ₹20,000-cr warrants, Adani's appointment on board

‘Warrant holder would pay minimum of ₹104.72, about 25% of the issue price at the time of subscription’

September 17, 2022 08:23 pm | Updated 08:23 pm IST - New Delhi

Ambuja Cements, which has been acquired by the Adani family, has called for an extraordinary general meeting (EGM) with its shareholders on October 8.

In the EGM, Ambuja Cements will seek shareholders' approval for the appointment of Gautam Adani and others on the board and a ₹20,000 cash infusion in the company through preferential allotment of warrants.

The company has sought approval for allotment of preferential allotment of 47.74 crore warrants at a price band of ₹418.87 to Harmonia Trade and Investment Ltd., a promoter group entity, totalling ₹20,001 crore in one or more tranches.

The warrant holder would pay a minimum of ₹104.72, about 25% of the issue price at the time of subscription, and a further payment of ₹314.15 at the time of exercise of the rights to convert into equity shares.

Ambuja Cements, which also owns 50.05% in ACC Ltd., has called for an EGM of the shareholders "scheduled to be held on Saturday, October 8, 2022" with 12 resolutions seeking various approvals including for the appointment of Adani Group chairman Gautam Adani, his son Karan Adani, two directors and four independent directors on the board.

On Friday, Adani Group announced the completion of the acquisition of Ambuja Cements and ACC for a total consideration of $6.5 billion which includes the buyout of Swiss major Holcim's stake in the two firms and subsequent open offers to minority shareholders.

The conglomerate named its founder chairman Gautam Adani as the head of Ambuja Cements. It has also appointed his son Karan Adani and M.R. Kumar representing Life Insurance Corporation on the board of the company.

On Friday, after Adani's takeover, the two cement firms ACC and Ambuja Cements had announced the resignation of their board of directors, including the CEOs and CFOs.

It named Ajay Kumar as the new CEO of Ambuja Cements in place of Neeraj Akhoury, and Sridhar Balakrishnan for ACC.

N.S. Sekhsaria, the person who founded Ambuja Cements and was on the board for more than 20 years, has now been designated as chairman emeritus. He had remained as its non-executive chairman even after the sale of the company to Holcim.

Besides, Ambuja Cements and ACC are also changing the financial year of the company from January-December to the April-March format. Ambuja has sought approval for change in the Articles of Association of the company, in the meeting which would be held virtually through video conferencing.

Moreover, it has also changed the registered office address to the Ahmedabad-based Adani Corporate House.

The acquisition of the two cement firms is the largest ever buyout in the infrastructure and materials sector so far in the country and also the biggest acquisition by Adani.

The Adani family, through their special purpose vehicle Endeavour Trade and Investment Ltd., completed the acquisition after closing the transaction with Swiss firm Holcim and an open offer, as per a statement.

Adani Group chairman Gautam Adani had earlier described cement as an exciting business, with headroom for growth in India.

The combined market capitalisation of Ambuja Cements and ACC Ltd. is $19 billion as of date.

Currently, Ambuja Cements and ACC have a combined installed production capacity of 67.5 MTPA.

Aditya Birla group firm UltraTech leads the cement sector with an installed capacity of 119.95 MTPA.

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