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UltraTech drops out of race for Holcim-Lafarge assets

Kumar Mangalam Birla has decided to drop out of the race to buy overseas cement assets of Holcim & Lafarge. Ultratech confirmed to ET NOW that the company has not participated in the final bidding round, deadline for which ends today.

Ultratech had earlier shown interest in buying Brazil, Phillipines assets of Holcim-Lafarge and had placed a bid in the first round. Ultratech had conducted due diligence process for assets worth around $2 bn but decided to drop out at the final stage.

Industry experts point out that the recent acquisition of JP Associates’ M.P. unit by Ultratech has quelled KM Birla’s appetite for acquisitions in the cement sector. Sources also share that Ultratech would strategise to grow in capacity in India to reach the 100 million tonnes target rather than go overseas to markets which have less growth opportunities than India.

Holcim & Lafarge are merging their operations and have to sell several global assets in order to get clearance from competition watchdogs in various countries.

Indiabulls’ assurance on proposed LVB merger: Chairman Gehlaut won’t sit on board if RBI insists

MUMBAI: The Indiabulls Group, which is actively chasing its merger with

Lakshmi Vilas Bank

, has indicated that if the Reserve Bank of India (RBI) wishes, then its chairman Sameer Gehlaut will be neither the chairman of the merged entity nor hold a board position.

The verbal assurance was given by Gehlaut at a recent meeting with RBI officials who have not given a green signal to the proposal. Among other things, the banking regulator is awaiting the feedback from Enforcement Directorate and income tax department on Indiabulls promoters. “Indiabulls Group officials have informally told this to RBI. They have indicated that Indiabulls will comply with whatever the regulator wants,” a person familiar with the matter told ET.

This comes a month after Gehlaut in a letter to RBI had said the Indiabulls promoter group shareholding would be lowered below 10% in the proposed bank to be formed after the amalgamation of Indiabulls Housing Finance (IHF) with Lakshmi Vilas Bank (LVB).

Gehlaut’s name was earlier announced by Indiabulls Housing Finance, the largest company in the group, as the non-executive chairman.

“If Gehlaut is not on the board, then the process to declassify him as promoter is automatic and complete,” said another person.

Gehlaut had promised RBI that he and other corporate promoters of IHF would declassify themselves from being the promoter group in the amalgamated bank. According to Securities Exchange Board of India (Sebi) rules, a combined promoters’ holding of less than 10% will fulfil the conditions of ‘depromoterisation’ in the amalgamated entity. Such shareholders, once declassified, will neither have special rights that promoters enjoy under a company’s articles of association nor will be required to make disclosures that promoters do under the insider trading rules of the market regulator.

On Friday evening, RBI directed the private sector lender LVB to follow the restrictions under the regulator’s prompt corrective action (PCA) framework. The PCA norms kick in once a bank’s total capital, tier I capital (i.e, equity and free reserves) and non-performing asssets beach certain levels. The announcement may leave the industry guessing on the fate of the deal.

“PCA is now almost automatic and technically it may not have anything to do with the merger issue. However, there is another view that if the merger was imminent then the regulator would not have imposed the PCA on LVB. Given RBI’s style of functioning and going by past experience it may remain silent for weeks and share no explanation for taking or not taking a decision,” said a senior banker.

In its pitch to the regulator, Indiabulls Housing said its tier I capital of Rs 16,000 crore will be able to withstand losses in the loan book of LVB which has reported Rs 2,200 crore in the past six quarters. IHF’s asset size is more than three times that of LVB’s.

RBI has been extremely selective in issuing new banking licence, letting nonbanking finance companies convert into banks, and even allowing corporates or inpiduals buy more than 5% in a private bank.

Indiabulls Real Estate, Embassy Group aim to complete merger by December end

Property developers Indiabulls Real Estate and Embassy Group are looking to complete their proposed merger, which marks the former’s complete exit from real estate business, by December end.

The merger that will create one of India’s largest listed property development platforms has received nod from anti-monopoly watchdog the Competition Commission of India (CCI). It has also received regulatory approvals from the NSE, BSE, capital market regulator Securities & Exchange Board of India (SEBI).

The companies will now proceed with filing of requisite application with NCLT for its approval to the scheme of merger. Both the companies had signed their definitive agreements for the merger August and their respective boards had approved corresponding share swap ratio. ET was first to report the proposed development.

According to the terms approved by boards of both the merging entities,

Indiabulls Real Estate

shares are valued at Rs. 92.5 per share. Shareholders of Embassy subsidiary NAM will get 6.619 shares of Indiabulls Real Estate for every 10 shares of NAM, while NAM Opco shareholders will get 5.406 shares of Indiabulls Real Estate for every 10 shares in NAM Opco.

“With the scheme having received necessary approvals from CCI, SEBI and the stock exchanges and definitive agreements entered with BREP (Blackstone entities) and other institutional investors, the merger is now fully on track to fruition. We hope to complete the process by the third quarter of FY22,” said Jitendra Virwani, Chairman, Embassy Group.

This will be achieved through a cashless structure as Embassy subsidiaries–NAM Estates (NAM) and Embassy One Commercial Property Developments (NAM Opco)–will swap shares with Indiabulls Real Estate. The combined listed entity will be 44.9% owned by Embassy Group, 26.2% by the existing public and institutional shareholders, 9.8% by existing IBREL promoter group and around 19.1% by the Blackstone group and other Embassy institutional investors.

Embassy Group, one of the largest developers in Bangalore, already holds 14% of listed Indiabulls Real Estate. Following the completion of this merger, the Embassy Group will become the promoters of the combined entity.

The resulting combined entity, to be known as Embassy Developments, will hold both Embassy Group’s and Indiabulls Real Estates’ ongoing, completed but unsold and planned projects with 80.8 million sq ft of development potential, as one of the largest property development platforms in India.

The combined entity is likely to benefit from a complementary pan-India presence across key markets including a strong presence in the commercial and residential market of Bengaluru, Mumbai and National Capital Region (NCR).

“Embassy Group completing the execution of definitive agreements with institutional investors, including BREP, to participate in the merger and the Scheme receiving required approvals from CCI, SEBI & the stock exchanges in a timely manner are significant achievements and a significant step closer to the completion of the merger. These institutional investors bring with them strong corporate governance standards and best practices and will only further enhance value for shareholders of the combined entity in the long term,” said Mehul Johnson, Joint MD, Indiabulls Real Estate.

The merger is expected to provide persification to the listed company’s shareholders through a balanced mix of residential and commercial development with visibility on near term liquidity through sold receivables in excess of Rs 4,220 crores for the combined entity.

Indiabulls Real Estate has recorded one of its highest quarterly sales figures in the last quarter at Rs 990.5 crore led by its luxury projects including Indiabulls Blu Estate & Club residential towers in Worli. Embassy Group projects have shown a similar significant sale uptake in the same period within the Bangalore market.

SoftBank-backed Better to go public in $7.7 billion SPAC deal

SoftBank Group Corp-backed Better HoldCo said on Tuesday it will go public through a merger with a blank-check firm sponsored by investment firm Novator Capital, valuing the mortgage startup at $7.7 billion.

As part of the deal with Aurora Acquisition Corp, SoftBank will invest $1.5 billion, giving Better a pre-money valuation of $6.9 billion. Novator will invest $200 million.

The deal will provide $778 million in proceeds for Better.

Founded in 2016, Better offers mortgage and insurance products to homeowners through its online platform. It says its customers can get their loans closed in as little as two weeks.

SPACs are listed companies that have no regular business operations but to find a company to merge with, thereby taking the target company public.

BofA Securities is the financial adviser to Better, while Barclays advised Aurora.

Emirates says to work closer with flydubai, not merging

Emirates will work closer with flydubai but the two Dubai state-owned airlines will not merge into a single brand, Emirates’ president said in an interview broadcast on Monday.

“The brands would remain separate but going forward the airlines would operate far more closer than they have perhaps done in the past,” Tim Clark said in a pre-recorded interview with aviation consultant John Strickland.

ZEE | ZEE merger with Sony TV may face regulatory delays

Mumbai: The proposed merger of Zee Entertainment Enterprises (ZEE) and Sony Pictures Networks India (SPN) will need regulatory and compliance permissions, approval from 75% of shareholders, and could face integration issues, say legal and financial experts.

While it takes 30-60 days for the due diligence, stitching the deal will require consent from the lenders, approvals from shareholders and regulatory bodies like the Competition Commission of (CCI), as well as by the National Company Law Tribunal (NCLT), a time-consuming affair further hindered by the Covid-19 backlog.

“Typically, the transaction will take at least a year to be completed . Presently, it’s a non-binding document, so the first step will be the signing of a binding definitive agreement after due diligence. That should happen in a month or two,” said Sudip Mahapatra, partner at S&R Associate. “The next steps include approvals from the shareholders, regulatory bodies and lenders.”

zee

Meanwhile. it is not clear whether Invesco, the largest shareholder of ZEE, will support the transaction. The financial investor, which owns a 17.88 % stake in the company, had ten days ago called for an EGM to oust Goenka and two other non-executive non-independent directors from the board of the company. It had not cited any reasons for doing also and it has also proposed the appointment of six independent directors.

Invesco’s support could be crucial as the deal requires the approval of 75% of ZEE shareholders.

An email query sent to Invesco, seeking its views on the deal did not elicit a response till press time.

An M&A expert who worked on the deal said the merger ticked all boxes and it would be strange for any financial investor to oppose the deal. “It’s a transaction which will create value for shareholders. We have already seen that the Street is happy with the valuation. Also, with Sony overseeing the board, there will be no room for any corporate governance lapses,” he said.

On the integration issue , there are a few genres, including Hindi general entertainment and movies, as well as Marathi, where both the companies have competing channels. A few will have to be shut down. Another challenge will be employee rationalisation, which could result in at least a few hundred positions becoming redundant.

Zee | Zee’s 18% owner wants new board to review Sony merger

(This story originally appeared in on Sep 27, 2021)

Mumbai: Invesco, the largest shareholder in Zee Entertainment Enterprises, is not against the company’s proposed merger with Sony Pictures Networks but wants a new board to evaluate the deal as well as decide on “future leadership”, it has said in a letter to the company’s board.

While the proposed deal allows Zee MD Punit Goenka to be in charge of the merged business, the US-based fund, which holds 18% in Zee, had sought a rejig of the company’s board including his ouster. Invesco said, “A newly constituted board supported with the strength of independence will be best suited to evaluate and oversee the potential for strategic transactions, like the one announced (with Sony), as well as to make determinations on the future leadership of the company.”

“We note that the disclosure of September 22 (the merger announcement) refers to the future board composition of the company at a time when the current composition of the board is subject to a shareholder vote on the back of our EGM requisition.” Invesco had asked Zee to call an extraordinary general meeting (EGM) of shareholders seeking removal of the company’s three non-independent directors and induction of six new independent directors on its board. Two of the non-independent directors subsequently resigned, while Goenka continued.

“We trust current board will adhere to its fiduciary duties and not violate statutory obligations to convene the EGM as requisitioned by Invesco,” said the fund. After Invesco wrote seeking EGM, the company signed a non-binding deal with Sony, which allows Goenka to be the MD of the merged entity and his family to hold up to 20% in it.

“We continue to believe that the business (Zee) is valuable, whether on its own or in strategic alignment with partners such as Sony. However, decisions of material strategic import must follow and not precede actions towards establishment of a proper and independent governance structure as determined by the company’s shareholders,” read the Invesco letter signed by VP Aroon Balani. “In this context and against the backdrop of our EGM requisition, your disclosure of September 22 is symptomatic of the erratic manner in which important and serious decisions have been handled at the company.”

When asked about Invesco’s reaction, a Zee spokesperson said, “The board is seized of the matter. The company will take necessary action as per applicable law.”

Explaining the reason for the EGM requisition, Invesco said, “Precisely to protect shareholder value and in exercise of our statutory rights as an ordinary shareholder, we have called upon the company to hold an EGM, and it is your duty under company law to now do so. At this EGM, shareholders will decide the composition of the board in a free and democratic manner.”