Sajjan Jindal-LED JSW Group has initiated a discussion with a private equity company (PE) Carlyle to join forces and support his offer for Indian Holcim cement operations, said people were aware of this problem.
Holcim Group, the largest cement maker in the world, is looking to get out of India 17 years after the entry, put his arm registered in Twin – Ambuja Cement and ACC sold as part of a global strategy to focus on the core market, ET reported April 14.
JSW, one of the strong competitors in the commotion, is busy regulating equity and debt financing for multi-billion transactions that, according to industrial estimates, can cost Rs 52,000 Crore ($ 7 billion), but maybe even as high as a hospital. 80,000 crore ($ 10.6 billion), depending on the success that might be open in both companies.
JSW is open to raise as much as Rs 18,750 ($ 2.5 billion) Crore from the PE group as a consortium.
Bid possibly in a month
Consider the size of a big check, more than one PE group will likely work together and then bid together with JSW Group. “Carlyle size funds can place $ 1-1.5 billion themselves and may also bind co-investors from other bumps bracket funds or their limited partners (LPS),” said a senior executive with anonymous requirements, as a personal discussion.
Apollo Global Management and Synergy Metals Holdings Investasi are investors in JSW Cement. They invested RS 1,500 Crore last July to accelerate the expansion of its current capacity of 14 million tons per year (MTPA) up to 25 MTPA in 2023 on the capex RS 3,600 Crore. JSW also discussed with Apollo to join the biggest M & A efforts until now.
The last quantum and other detail deal is still done, but the source says the plan is to solve everything and bid in the next month.
Parallel with PE discussions, a $ 13 billion steel-to-genewables group also in talks with global bank clutches for supported financing.
JSW Steel has around RS 15,000 crore cash at the end of September 2021, according to ETAIG calculations, while for JSW energy is Rs 754 Crore. It amounted to RS 136 Crore for JSW cement which was not registered at the end of March 2021, according to the latest data available.
JSW Group, Carlyle and Apollo Global Management declined to comment.
Global backing
In 2016, JSW Cement had similar support from Bain Capital and CVC Capital Partners when it was selected for the final round of negotiations to acquire the India Lafarge 11-MTPA portfolio. It was finally outbid by NIRSA (then changed its name to Semen Nuvoco).
One of the resources mentioned above said other major funds such as Blackstone, Advent International, CVC Capital and Bain, and global sovereign funds, can be approached due to past links, trends for traditional economic companies and global industrial sector investments. However, this cannot be independently verified.
“Such opportunities do not knock every day. When Holcim takes over Ambuja and ACC, many domestic business houses have the left feeling. Two business houses, JSW and Adani, both show their intention to make it big in the cement business,” said Rakesh Arora , founder, goes Indian shares. “The big obstacle here is the size of the asset. Even if someone assumes that the agreement occurs at the current market price, which is very unlikely, one looks at almost Rs 50,000-60,000 the size of the Crore ticket.”
This means that smaller cement companies will work with PE players to make a combined offer, he said.
Other obstacles will be the approval of competition commissions for companies such as Ultratech because, combined with Ambuja and ACC, they will achieve the dominant market share in several bags, Arora said. However, there will be an intense offer for this valuable asset, he added.