Adani announces share swap for port, power firms

The group's transmission company will be listed on stock exchanges

Adani Enterprises on Friday announced a plan to demerge the $9.4-billion group’s port and power operations into Adani Ports & Special Economic Zone and Adani Power. The group’s transmission company will be listed on the stock exchanges and mining company merged with Adani Enterprises.

Adani Ports will issue new equity to Adani Enterprises shareholders in the ratio of 14,123 shares for every 10,000 held. Adani Power will issue new equity in the ratio of 18,596 shares for every 10,000 held in Adani Enterprises. Adani Transmission will issue shares in the ratio of 1:1 to Adani Enterprises shareholders.

The shares held by Adani Enterprises in these three companies will be cancelled. The appointing date for the scheme had been set for April 1, the Adani group stated.

Adani Enterprises holds 75 per cent stakes in Adani Port and Adani Power and the Adani family owns 75 per cent of Adani Enterprises. The promoters of Adani group will get a direct controlling stake of 56-57 per cent in the two companies post restructuring, unlike currently through AEL.

Adani Transmission will be listed on the BSE and the National Stock Exchange, and Adani Mining will be merged into Adani Enterprises. The transactions are expected to close by December 31, 2015.

“This scheme will simplify the corporate structure and is a decisive step towards unlocking the potential value of the Adani group companies. The scheme will drive the next level of value creation, competency, decision making and will be able to accelerate business growth. These developments and a positive macro-economic environment reaffirm our commitment to securing the infrastructure and energy needs of the country,” said Gautam Adani, chairman of the Adani Group.

The Adani Enterprises stock reacted positively to the news and closed 7.7 per cent higher at Rs 629 on Friday, while Adani Ports and Adani Power shares remained flat.

The group said the scheme would provide the shareholders of Adani Enterprises direct ownership of the operating companies and increase free float. The transactions are expected to unlock value by eliminating the holding company discount. Adani Enterprises will continue to operate the mining, edible oils, city gas and trading businesses.trading businesses.

RECAST IN A NUTSHELL

• Adani Enterprises shareholders to get 14,123 shares in APSEZ for 10,000 held
   
• AEL shareholders to get 18,596 shares in Adani Port for every 10,000 held
   
• AEL shareholders to get 1:1 shares in Adani Transmission
   
• Adani Transmission to be listed on BSE, NSE
   
• Adani Mining to be merged with AEL