Bain to invest up to Rs 5.80 billion in Himadri Chemicals

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Bain Capital to invest up to Rs 5.80 billion in Himadri Chemicals
Himadri Chemicals and Industries (Himadri), one of the largest global players in coal-tar pitch and advanced downstream chemical products announced on Saturday the board of directors of the company approved to issue 6.31 million shares to Bain Capital India Investments (Bain Capital), one of the oldest and largest global private investment firms with more than USD 60 billion in assets under management, on a preferential basis, both parties entered into an agreement for the same at a price of Rs 400 a share (issue price), resulting in an equity raise of Rs 2.52 billion (USD 54 million) (preferential offering).

The issuance is subject to shareholders` approval, for which an EGM has been called for on January 29, 2010. Upon issuance of such shares, Bain Capital will own 15.39% of the fully diluted and expanded share capital. Bain Capital will be making a mandatory tender offer for 20% of the expanded equity base in accordance with the takeover regulations, amounting to a further investment of up to Rs 3.28 billion (USD 70 million), which together with the preferential offering would make this one of the largest private equity investments in india over the past year or so.

The issue proceeds will be used to augment the company`s capacity in current line of businesses as well as to further forward integrate into other value added downstream products including expanding capacity in power generation, besides expansion in China and other global markets.