Welspun, Apollo Global conclude PE investments

The board of directors of Welspun Corp (WCL) has authorised the issuance and allotment of fully convertible debentures (FCDs) and global depository receipts (GDRs) to certain affiliates of Apollo Global Management, LLC, and its subsidiaries. Apollo Global is one of the leading global alternative asset managers.

As a part of the total commitment which will be around $500 million, funds affiliated with Apollo have invested around $290 million in WCL, of which about $175 million has been invested by way of preferential allotment of FCD / CCD and about $115 million by way of non-voting GDRs. The FCDs carry a coupon of 5 per cent and will be mandatorily fully converted within 18 months into equity shares at Rs.225 per share, representing 13.3 per cent of WCL's equity. Funds affiliated with Apollo have also subscribed for non-voting GDRs of $115 million at the same price.

Further, funds affiliated with Apollo have acquired 12.5 per cent of the equity of Welspun Maxsteel (WMSL) from Welspun Steel for about $31 million. They have also agreed to invest about $29 million into WMSL to be used for additional capital expenditure.

Sanjay Patel, Head of International Private Equity and Senior Partner of Apollo Management International LLP, and Mintoo Bhandari, Managing Director of AGM India Advisors, have been appointed to the board of WMSL as Apollo nominees. Furthermore, Mr. Bhandari has been appointed to the board of WCL as Apollo nominee.

Apollo and its affiliates are also in discussions with Welspun Infratech (WITL), a subsidiary of WCL, to explore an additional investment of up to $150 million in WITL and its subsidiaries, in the form of debt, equity or a combination. The end use of the funds in WITL will be project-specific and the form of such investments is being actively reviewed.

The $3 billion Welspun Group is a leading player in line-pipe and home textiles and its clients include several Fortune 100 companies in the oil and gas and retail sectors. It has a presence in over 50 countries and has 24,000 employees. WCL offers complete pipe solutions and can manufacture line-pipes ranging from half-an-inch to 100 inches along with specialised coating, double jointing and bending. It has a capacity of about 2 million tonnes annually in Dahej, Anjar in Gujarat, Arkansas in the U.S., and Saudi Arabia. The company has further become an integrated pipe manufacturer by setting up a plates and coils manufacturing facility.

Welspun Maxsteel is the largest merchant producer of gas based direct reduced iron (DRI). Formed in May 2009 after Welspun Steel acquired Vikram Ispat, Grasim Industries' sponge iron division, WMSL's facilities include a captive port.

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Printable version | Jul 26, 2021 11:22:09 PM |

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