CG Power and Industrial Solutions said Murugappa Group firm Tube Investments of India Ltd has acquired a controlling stake in it and now holds 50.62 per cent of the company’s paid-up share capital.
The company infused Rs 700 crore into the company and appointed directors on its board.
According to the stock exchange filing, CG Power said the company board has issued 64.25 crore shares of Rs 2 at a price of Rs 8.56 (including premium) per share aggregating to Rs 550 crore to Tube Investments of India Ltd (TII).
Also, TII, a Murugappa Group firm, have been issued 1.52 crore warrants, each carrying a right exercisable within 18 months, for aggregate consideration of Rs 150 crore.
“Post the allotment of securities, TII has acquired a controlling interest in the company and holds 50.62 per cent of the paid-up equity share capital of the company,” it said.
TII paid Rs 5.87 crore towards subscription of equity shares and 25 per cent upfront consideration for warrants.
TII will eventually hold a 56.61 per cent stake once all warrants are converted into equity.
In a separate filing, TII said, “with effect from today i.e. November 26, 2020, the company, viz. Tube Investments of India Limited has been classified as the ‘promoter’ of the CG Power and the board of directors of CG Power has been reconstituted.”
CG Power said its entire board including non-executive chairman Ashish Guha and whole-time executive director Sudhir Mathur have resigned.
Murugappa Group has appointed six members on the CG Power board, with Vellayan Subbiah, who currently is the Managing Director of TII, as its chairman. Natarajan Srinivasan, a director on Murugappa corporate board, has also been appointed as the new Managing Director.
M A M Arunachalam, a fourth general member of the Murugappa family, will also be on the board of CG Power.
Three independent directors – Shailendra Narain Roy, Sasikala Varadachari and P S Jayakumar- have also been appointed on the company board, it said.
Others who resigned from the CG Power board included Jitender Balakrishnan, Narayan K Seshadri, Ramni Nirula, Pradeep Mathur, Aditi Raja and Rathin Roy.
The takeover follows lenders to CG Power agreeing to a one-time loan restructuring.
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