BackNirma plans to raise Rs4,000 crore via bonds for Lafarge asset buy
LafargeHolcim has entered into an agreement to sell 100% stake in its Indian arm to Nirma
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Mumbai: Nirma Ltd is planning to raise about ₹ 4,000 crore from the domestic corporate bond market to part-finance its purchase of Lafarge India’s assets, two bankers familiar with the developments said.
“The arrangement is that they would have an equal amount of fund-raising through bonds and loans," said one of the bankers cited above seeking anonymity.
LafargeHolcim has entered into an agreement to sell 100% stake in its Indian arm to Nirma Ltd, the world’s largest cement producer said in a release on Monday.
The deal is valued at around $1.4 billion and part of it will be financed through loans and the rest through bonds, said the second banker, also on condition of anonymity.
While the details of the fund-raising through bonds are still being worked out, the company can take advantage of the drop in bond yields to three-year lows last week.
Also Read: Nirma to buy Lafarge India assets from LafargeHolcim for $1.4 billion
The drop in benchmark government bond yields is expected to rub off on corporate bonds as well.
“Many long-term investors are waiting for bonds by manufacturing companies. And Nirma would gain simply because it comes after many years," said a bond trader.
Promoted by Ahmedabad-based Karsanbhai Patel, Nirma makes a variety of consumer products such as detergents and cosmetics as well as industrial products such as soda ash and glycerin.
The group is unlisted and as per the latest annual report of 2012-13, Nirma’s consolidated earnings before interest, tax, deprecation and amortisation (EBITDA) was ₹ 612 crore for the first six months of fiscal 2013.
The group has about 18,000 employees, with an annual turnover of more than ₹ 7,000 crore, according to the company’s website.
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