Murugappa Group led Tube Investments will be investing Rs 700 crore to acquire 51% stake in CG Power and Industrial Solutions, as per the media reports.
The transaction is subject to Tube Investment emerging winner of the Swiss challenge process that the lenders of CG Power will undertake by August 28. This process allows other potential suitors to make a counteroffer, after which the first investor, in this case Tube Investment, will have the option to match the highest bid.
The deal with the Rs 40,000-crore Murugappa Group is also subject to the lenders accepting a one time settlement, and restructuring of funded facilities and guaranteed debt. The transaction would also need the approvals of respective shareholders and the Competition Commission of India.
“If any of the conditions precedent set out in the SSA are not fulfilled, the SSA will be terminated and the preferential allotment will be cancelled in accordance with the terms of the SSA,” CG Power said.
The Mumbai-headquartered CG Power has been under the scanner for over a year since it came to light that there were financial irregularities, which involved money being siphoned out of the company to other group companies, by promoter Gautam Thapar and other key executives.
CG Power, which offers power and industrial equipment and solutions, has 13 manufacturing facilities and employs over 3,000 people directly and 8,000 indirectly.
Founded in 1900, Murugappa Group is one of India’s leading business conglomerates. The Group has 28 businesses including nine listed Companies traded in NSE & BSE. Brands like BSA, Hercules, Montra, Mach City, Ballmaster, Ajax, Parry’s, Chola, Gromor, Shanthi Gears and Paramfos are from the Murugappa stable. The Group has a workforce of over 50,000 employees.
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