Home / Companies / News /  Adani  pledges  entire Ambuja,  ACC  stake to fund  $6.5  bn  deal

MUMBAI : Billionaire Gautam Adani pledged his entire stake in Ambuja Cements Ltd and ACC Ltd, worth as much as $12.5 billion, to foreign banks to fund his family’s $6.5 billion acquisition of the two cement makers.

The family’s 63.15% stake in Ambuja Cements and 56.69% in ACC (of which 50.05% is held through Ambuja Cements) have been pledged by Adani Group, filings made to BSE on Tuesday by Ambuja Cements said. On 16 September, the Adani family completed the acquisition of Ambuja Cements and ACC from Holcim India, making the group India’s second-largest cement maker after Ultratech Cement Ltd.

The transaction was funded by loans worth $4.5 billion from 14 international banks. Barclays Bank Plc and Deutsche Bank AG acted as advisers to the Adani family, with Standard Chartered Bank as the structuring adviser.

The shares of Adani family entities, including Endeavour Trade and Investment Ltd and Xcent Trade and Investment Ltd, and Holcim’s Holderind Investments Ltd, have been charged for such loans, Ambuja said in the filings.

“Non-disposal undertakings (NDUs) have been provided over the shares in Ambuja Cements held by Holderind," said the stock exchange filing. NDUs are undertakings given by a shareholder to another person (generally a lender) undertaking not to transfer or otherwise alienate the securities held by such shareholder in a company.

On Friday, Adani Group overhauled the boards of Ambuja Cements and ACC following the completion of the acquisition.

On 12 September, Mint first reported that Gautam Adani and his son Karan would join the boards of two of India’s oldest cement companies, ACC and Ambuja Cements. On 16 September, an overhaul of the board of the two cement makers was announced.

The new Ambuja Cements board comprises Gautam Adani (chairman), Karan Adani, Rajnish Kumar (former SBI chairman) as independent director, Maheswar Sahu (chairman in GIFT SEZ, IRM Energy), Ameet Desai ( was adviser to Gautam Adani at Adani Group and the executive director and group CFO), Purvi Sheth (an HR professional), M.R. Kumar (chairman of LIC) and Ajay Kapur (CEO of special projects at Adani Ports and Special Economic Zone).

The new board of ACC includes Karan Adani, Vinay Prakash, Sridhar Balakrishnan (CEO), Sandeep Singhi, Nitin Shukla, Rajeev Agarwal (former whole-time member, Sebi) and Arun Kumar Anand.

Following the acquisition, the newly formed board of Ambuja Cements has approved an infusion of 20,000 crore into Ambuja via preferential allotment of warrants.

In a notice to its shareholders, Ambuja Cements said the company would utilize the proceeds from the preferential issue of warrants to fund the capital requirement for the purpose of capital expenditures, de-bottlenecking capital expenditure, logistics infrastructure, digitizing logistics, optimizing plants to accelerate ESG compliance, acquisitions, consolidation, working capital requirements, investment in technology and for general corporate purpose.

“Cement is a game of economics dependent on energy costs, logistics and distribution costs, and the ability to leverage a digital platform to transform production as well as gain significant supply chain efficiencies. Each one of these capabilities is a core business for us and therefore provides our cement business with a set of unmatched adjacencies. It is these adjacencies that eventually drive competitive economics. In addition, our position as one of the largest renewable energy companies in the world will help us manufacture premium quality green cement well in line with the principles of a circular economy," Gautam Adani said on Friday.

All of these dimensions put the Adani Group on track to become the largest and most efficient cement manufacturer by no later than 2030, he added.

Currently, Ambuja Cements and ACC have a combined installed production capacity of 67.5 million tonnes per annum.

ABOUT THE AUTHOR

Anirudh Laskar

Anirudh Laskar is a senior editor at Mint, with 17 years of experience. He has reported on significant corporate matters including large mergers and acquisitions, India's emerging e-commerce sector and regulatory issues in the financial services industry. Based out of Mint’s Mumbai bureau, Anirudh has worked with Business Standard and The Telegraph before joining Mint in 2009.
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