Chennai: Murugappa Group firm Tube Investments (TI) is acquiring a controlling stake in scam-hit CG Power for Rs 700 crore in the form of shares and warrants.
The board of TI has approved a binding bid to acquire CG Power, and the two companies have entered into a securities subscription agreement, the companies informed the stock exchanges on Friday.
The consideration, which will be in a combination of equity shares and convertible warrants, is fixed at the rate of Rs 8.56 per equity share (of Rs 2 each) of CG Power and at Rs 8.56 per warrant. TI will be issued 64,25,23,365 equity shares and 1,75,233,645 warrants, each carrying a right to subscribe to one equity share per warrant within 18 months from allotment. Tube Investments will gain approximately 50.6% stake in CG Power following the allotment of the equity shares, and around 56.6% post conversion of the warrants. The acquisition is expected to be closed in 120 days, and is subject to TI emerging as the successful bidder under the Swiss challenge process to be undertaken by CG Power’s lenders on August 28. It is also subject to the approval of CG Power’s shareholders and the Competition Commission.
