You are here: Home » News-CM » Equities » Hot Pursuit
Business Standard

CG Power spurts after Tube Investments takes majority stake

Capital Market 

CG Power and Industrial Solutions hit an upper circuit of 5% at Rs 41.15 after Tube Investments of India acquired a controlling stake in the company.

In a BSE filing made after market hours on Thursday (26 November 2020), CG Power said that its board approved allotment of 64.25 crore preferential shares to Tube Investments of India (TII) at Rs 8.56 each, aggregating to Rs 550 crore.

The company has also issued 17.52 crore warrants to TII for aggregate consideration of Rs 150 crore. About Rs 37.50 crore, or 25% of the aggregate consideration will be paid on warrant subscription. Each warrant carries a right exercisable by the warrant holder to subscribe to one equity share per warrant within 18 months from allotment.

"Post the allotment of securities to TII as stated above, TII has acquired a controlling interest in the company and holds 50.62% of the paid up equity share capital of the company, CG Power said in a statement.

Separately, TII said: We inform that the company has acquired a controlling interest and holds 50.62% of the issued, subscribed and paid up equity share capital of CG Power and that CG Power has, therefore, become a subsidiary of our company viz. Tube Investments of India Limited, with effect from today i.e. 26 November 2020.

Further, with effect from today, the company, viz. Tube Investments of India, has been classified as the 'promoter' of the CG Power and the board of directors of CG Power has been reconstituted pursuant to the terms of the subscription agreement.

Additionally, CG Power also announced the appointment Vellayan Subbiah, who currently is the Managing Director of TII, as the chairman of the company. Natarajan Srinivasan, a former director on Murugappa corporate boards, has been appointed as the new managing director.

M A M Arunachalam, a fourth-generation member of the Murugappa family, will also be on the board of CG Power.

The company has also appointed Shailendra Narain Roy, Sasikala Varadachari and P S Jayakumar as the independent directors on the board of CG Power.

Further, in terms of the Securities Subscription Agreement (SSA), all the existing directors of the company, i.e. Ashish Guha, Sudhir Mathur, Ramni Nirula, Jitender Balakrishnan, Narayan K Seshadri, Pradeep Mathur, Dr. Aditi Raja and Dr. Rathin Roy have tendered their letters of resignation (including from the subsidiaries of the company) which will be effective from close of business hours on the closing date i.e. 26 November 2020.

In August 2020, the lenders of CG Power and Industrial Solutions had 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, on 7 August 2020, had said that its board had approved an investment of Rs 700 crore by Tube Investments for a 56.61% stake.

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.

Powered by Capital Market - Live News

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

Dear Reader,

Business Standard has always strived hard to provide up-to-date information and commentary on developments that are of interest to you and have wider political and economic implications for the country and the world. Your encouragement and constant feedback on how to improve our offering have only made our resolve and commitment to these ideals stronger. Even during these difficult times arising out of Covid-19, we continue to remain committed to keeping you informed and updated with credible news, authoritative views and incisive commentary on topical issues of relevance.
We, however, have a request.

As we battle the economic impact of the pandemic, we need your support even more, so that we can continue to offer you more quality content. Our subscription model has seen an encouraging response from many of you, who have subscribed to our online content. More subscription to our online content can only help us achieve the goals of offering you even better and more relevant content. We believe in free, fair and credible journalism. Your support through more subscriptions can help us practise the journalism to which we are committed.

Support quality journalism and subscribe to Business Standard.

Digital Editor

First Published: Fri, November 27 2020. 11:00 IST