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Competition Commission of India approved Avenir Investment's acquisition of Sammaan Capital Ltd
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IHC agreed to buy a 43.46% stake in Sammaan Capital for $1 billion or Rs 8,850 crore
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Sammaan Capital will issue preferential shares to Avenir, making IHC the new promoter
The Competition Commission of India on Tuesday gave its nod to Avenir Investment RSC, an affiliate of Abu Dhabi-based International Holding Company, to acquire Sammaan Capital Ltd.
IHC in October agreed to acquire a 43.46% stake in non-banking financial company Sammaan Capital for $1 billion or Rs 8,850 crore.
The NBFC, formerly known as Indiabulls Housing Finance, will be raising the capital by issuing preferential shares to Avenir after getting requisite approval. The investment will see IHC emerge as the new promoter of Sammaan Capital.
The deal will lead to significant equity dilution for existing shareholders, from 98.25% to 57.74%.
Deals beyond a certain threshold require approval from the CCI, which keeps a tab on unfair business practices as well as promotes fair competition in the marketplace.
Avenir-Sammaan Capital Deal
Post-preferential allotment, in which it will invest Rs 8,850 crore, Avenir will hold over 63 crore shares in the company, representing 43.46% of the holding. As per the agreement, 33 crore shares of the company will be issued to the investor at Rs 139 apiece, an 18% discount to the last closing price, in order to raise Rs 4,587 crore, while the rest will be through two tranches of warrants.
It will subscribe to 8.60 lakh warrants at the same price, with each carrying a right to subscribe to one equity share, which will help raise another Rs 1,207 crore, while another Rs 3,055 crore will be raised through the issue of 21.97 crore of similar warrants. This will trigger an open offer as per the regulatory guidelines to acquire an additional 26%.
Sammaan Capital share price ended 0.3% higher at Rs 141.55 apiece, ahead of the CCI announcement, compared to a 0.5% decline in the benchmark Sensex. The stock has fallen 7.5% on a year-to-date basis.
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