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CG Power hits the roof after lenders approve Tube India's offer

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CG Power and Industrial Solutions hit an upper circuit of 5% at Rs 22.68 after the company's lenders approved the takeover bid of the company by Murugappa Group-led Tube Investments of India.

Tube Investments of India emerged the successful bidder following a Swiss challenge bidding process, which was initiated by the lenders to CG Power, after the company had on 7 August said that its board had approved an investment of Rs 700 crore by Tube Investments for a 56.61% stake.

Consequently, the lender's declared Tube Investments of India's (TII's) offer as the successful offer, subject to compliance with all the conditions stated in the said letter of intent. CG Power will now hold an extraordinary general meeting of shareholders on 2 September 2020 to secure their approval for transfer of shares to Tube Investments.

Earlier, CG Power had reached a securities subscription agreement with Tube Investments to sell 64.25 crore shares at Rs 8.56 each for a total of Rs 550 crore. This will give Tube Investments a 50.62% stake in CG Power. Tube Investments will also be allotted 17.52 crore warrants, convertible to an equal number of shares within 18 months from the date of allotment, for Rs 150 crore. After the conversion of the warrants, Tube Investments stake in CG Power will grow to 56.61%.

Meanwhile, a meeting of the board of directors of CG Power is scheduled on 2 September 2020, to consider further fund raising through issue of securities on a preferential basis upto Rs 100 crore in accordance with applicable laws.

CG Power and Industrial Solutions is a global pioneering leader in the management and application of electrical energy. Its offerings include electrical products, systems and services for utilities, power generation and industries.

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(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)

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First Published: Mon, August 31 2020. 12:25 IST