Detergent major Nirma, which in July had agreed to buy the cement business of the French major Lafarge India, today raised Rs 4,000 crore debt to fund the deal, making it the largest rupee bond sale for a leveraged buyout.
“The Rs 4,000-crore five-year bond sale by Nirma offers a yield of 8.68 per cent was oversubscribed 1.5 times. This is the largest rupee bond sale for a leveraged acquisition as also the largest AA-rated debt instrument,” investment banking sources told PTI.
Sources also said the money was raised by Nirchem, special purpose vehicle created by Nirma for the buyout, will be used to fund the deal.
The i-bankers sources today said the issue has been closed successfully and will be listed on the exchanges.
At 8.68 per cent yield for a ‘AA’ rated company this is a good pricing, the i-bankers said.
Nirma, the maker of soaps and chemicals, could not be contacted immediately for confirmation.
According to a PTI report: On July 11, Swiss cement giant Lafarge-Holcim had announced that it had entered into an agreement to sell its assets in Lafarge India to Nirma for $1.4 billion or about Rs 9,400 crore to get the Competition Commission of India’s clearance for the deal as part of the global merger.
The agreement, part of the building material major’s 3.5 billion Swiss franc (about $3.6 billion) divestment plan, is crucial for approval from the fair trade regulator CCI for the multi-billion dollar global merger between Lafarge and Holcim that was announced last year.
The diversified Nirma group has presence in soaps, detergents, salt, soda ash, caustic soda, cement and packaging among others. It has 12 manufacturing facilities in the country and the US, and has a turnover of over Rs 7,300 crore.
Lafarge India operates three plants and two grinding stations with a total capacity of around 11 million tonnes per annum in the country.