Nirma raises Rs 4,000-crore debt to fund Lafarge deal

Detergent major Nirma, which in July had agreed to buy the cement business of the French major Lafarge India, on Thursday raised `4,000 crore debt to fund the deal, making it the largest rupee bond sale for a leveraged buyout.
“The `4,000-crore five-year bond sale by Nirma offers a yield of 8.68% was oversubscribed 1.5 times. This is the largest rupee bond sale for a leveraged acquisition as also the largest AArated debt instrument,“ investment banking sources told PTI here.

Sources also said the money was raised by Nirchem, special purpose vehicle created by Nirma for the buyout, will be used to fund the deal.

The Ahmedabad-based company had appointed Barclays, Credit Suisse and IDFC to manage the issue.

The i-bankers sources today said the issue has been closed successfully and will be listed on the exchanges. AA At 8.68% yield for a ` ' rated company this is a good pricing, the i-bankers said.

Nirma, the maker of soaps and chemicals, could not be contacted immediately for confirmation.

On July 11, Swiss cement giant Lafarge-Holcim had announced that it had entered into an agreement to sell its assets in Lafarge India to Nirma for $1.4 billion or about `9,400 crore to get the Competition Commission of India's clearance for the deal as part of the global merger.

The agreement, part of the building material major's 3.5 billion Swiss franc (about $3.6 billion) divestment plan, is crucial for approval from the fair trade regulator CCI for the multi-billion dollar global merger between Lafarge and Holcim that was announced last year.

The diversified Nirma group has presence in soaps, detergents, salt, soda ash, caustic soda, cement and packaging among others. It has 12 manufacturing facilities in the country and the US, and has a turnover of over `7,300 crore.

Lafarge India operates three plants and two grinding stations with a total capacity of around 11 million tonnes per annum in the country .

The Swiss giant, with presence in 90 countries, will continue to operate here through its subsidiaries ACC and Ambuja Cements with a com bined capacity of over 60 MTPA Bankers see them shifting back to giving loans once the environment giving loans once the environment is conducive. “Banks will definitely opt for its core business of lend ing once there is a revival in economy and viable lending proposals c o m e u p, “ Kathuria said.