Nagarjuna Construction Company Ltd (NCC) on Tuesday announced that its board of directors has approved an investment of $150 million by the Blackstone Group. The funds will be raised through a fresh issue of shares and convertible warrants.
The amount thus raised by the company will be used for the purpose of investing in the BOT (build-operate-transfer) projects and other infrastructure projects being developed by it as well as through its subsidiaries and associates, and for meeting company?s working capital and other long term funding needs.
A Ranga Raju, MD, NCC, said, ?This investment will not only allow us to make additional investments in public-private infrastructure projects, but will also expand our capital base, enabling us to bid for larger projects going forward.?
Blackstone will invest equity capital in the company in two tranches, where the PE player will be allotted 20,246,900 equity shares of Rs 2 each at a premium of Rs 200.50 (equivalent to approximately $100 million) and 9,111,111 warrants (with an exercise period of 18 months) of Rs 225 per warrant, with each warrant convertible into one equity share of Rs 2 each at a premium of Rs 223 (equivalent to approximately $50 million).
Speaking to FE, YD Murthy, senior vice-president of the company said, ?As per the existing shareholding pattern the promoters hold about 24.4% stake, FIs hold about 32%, mutual funds 15%, Rakesh Jhunjhunwala about 8% and the balance is with the public. After investment from Blackstone, the promoters? shareholding will come down to 22.2% on a fully diluted basis.?
Further, Blackstone will have representation on the board of NCC. An extraordinary general meeting of the members of the company is being scheduled on September 24, 2007, for obtaining the approval of the members of the company in respect of aforesaid issue of shares and warrants on preferential basis.