KKR backs SIMEC to invest in ABG Cement, India

KKR backs SIMEC to invest in ABG Cement, India
Published: 01 July 2015

Tagged Under: India KKR ABG Cement 

Private equity firm KKR is teaming up with diversified trading and commodities group SIMEC to invest INR9bn (US$141.5m) to take over the cement business of debt-laden ABG Group. The funding will help complete the delayed 5.8Mta cement project in Gujarat, multiple sources have told the Economic Times of India.

The deal will be undertaken through a multi-tiered financial transaction. The first part of the transaction, to be concluded in the coming weeks, will see KKR fund SIMEC to pick up a 51 per cent controlling stake in ABG Cements for INR5.25bn.  This will be followed by an additional INR3.85bn of funding collateralised by Agarwal's unencumbered (unpledged) shares in the company.

The money will be used to complete the 5.8Mta cement plant in Gujarat, fund working capital and pay back overdue creditors. SIMEC has already made a part payment to show their commitment to the deal, added the sources mentioned above. KKR too has signed a term sheet with ABG's management. A detailed due diligence process is currently ongoing.