Private equity firm and leveraged buyout specialist, Kohlberg Kravis Roberts (KKR), will invest up to Rs750 crores in Avnija, a wholly owned unlisted subsidiary of Dalmia Cements (Bharat) Limited (DCBL).
New York City-based KKR with $52 billion in assets under management will take a 15-per cent stake if the cement maker draws down only Rs500 crore, but the stake will rise to 20 per cent if it draws additional Rs250 crore, managing director Puneet Dalmia told Reuters today.
Post the proposed restructuring, Avnija will hold DCBL's 9.00MTPA cement manufacturing capacity, DCBL's 45.4 per cent stake in OCL India Limited along with the upcoming green field projects of 10.00MTPA across the country.
KKR will invest Rs500 crore in the 1st tranche with Avnija having the option to draw an additional Rs250 crore from KKR at an appropriate time, said Dalmia Cements in a press release.
In March 2010, Dalmia Cement had unveiled plans to spin off its cement, power and refractory businesses into its unit Dalmia Bharat Enterprises (DBEL), and list it on the stock exchanges by the end of the year. (See: Dalmia Cement to spin off cement, power and refractory businesses)
''When we realigned our businesses in March, 2010, one of our goals was to create separate pure play entities that could thrive on their own and have flexibility to raise capital. This transaction with KKR is not just about capital but the foundation of a long-term relationship. It will enable us to enhance our capacity and market share through organic as well as inorganic routes, while benefiting from KKR's global network and proven value creation capabilities,'' said Puneet Dalmia.