Reuters are reporting that Indian household products manufacturer Nirma has raised 40 billion rupees (US$600 million) to fund the acquisition of Lafarge India.
The four-tranche rupee offering was priced at annualised yields of 8.55%, 8.65%, 8.75% and 8.85% for tenors of two, three, four and five years, all in a separately transferable redeemable principal part format.
Investors bid for 80 billion rupees, showing that the rupee bond market is more than capable of supporting major acquisition financings.
One investment banker who was not on the deal called it a "paradigm shift" for corporate financing.
Nirma agreed to buy the Indian unit of Swiss cement company LafargeHolcim in July for an enterprise value of US$1.4 billion.
Nirma had limited options to fund the acquisition, since banks are not allowed to lend money to a company that is buying 100% of the equity in another company. Nirma could raise equity, borrow from a non-bank lender or issue bonds through a special purpose vehicle.
The bond market proved the cheapest option.
Read the article online at: https://www.worldcement.com/indian-subcontinent/19092016/nirma-raises-funds-lafarge-acquisition-287/