For $150 million Blackstone gets a 12.2-per cent stake and a seat on the board of Nagarjuna Construction Company

29 August 2007

Hyderabad: US-based private equity giant Blackstone Group will invest $150 million in Hyderabad-based construction group Nagarjuna Construction Company Limited, ranked as the third largest construction firm in India.

Blackstone''s decision to invest in Nagarjuna Construction is based on expectations of government and private spending in infrastructure projects in India rising to keep pace with demands of a booming economy.The Planning Commissionhas projected
investments in infrastructure to top $470 billion in the next five years.

This is the fourth investment in India this year by the New York-based Blackstone. Earlier this month, it reached an agreement to pay up to $165-million to acquire a majority stake in Gokaldas Exports Ltd, India''s leading garment exporter.

Nagarjuna Construction will make a fresh issue of shares and convertible warrants in favour of Blackstone GPV Capital Partners Mauritius V-A Ltd, Blackstone FP Capital Partners (Mauritius) V FII Ltd, Blackstone GPV Capital Partners (Mauritius) V-H Ltd.

Blackstone funds will invest equity capital in the Company in two tranches. Blackstone will be allotted 20,246,900 equity shares of Rs.2 each at a premium of Rs200.50 (equivalent to approximately $100 million) and 9,111,111 warrants, with an exercise period of 18 months, of Rs.225 per warrant.

Each warrant is convertible into one equity share of Rs2 each at a premium of Rs.223, (equivalent to approximately $50 million).

The all-equity investment will fetch Blackstone a 12.2-per cent stake in the company and a seat on the board.