The lenders of CG Power and Industrial Solutions have agreed to a one-time restructuring of the loans to the company, paving the way for the takeover by the Murugappa Group-led Tube Investments of India.
In a government application, CG Power said: “The Company, TI (Tube Investments) and the lenders now have the required binding agreements dated 20.”
The terms of the Securities Subscription Agreement (SSA) include CG Power’s lenders accept a one-time settlement and restructure the funded facilities and guaranteed debt under the terms of the firm’s binding offer to CG Power and the lenders in a mutually acceptable manner, said Tube Investments in a separate filing.
The agreement provides for a “compromise” settlement of Rs 650 billion upfront payment to lenders to convert Rs 200 billion of fund-based facilities into unrated, unsecured, unlisted, non-convertible bonds with a maturity of five years from the company to the lender.
The proposed resolution also provides that the lenders be paid to the best of their ability and on the spot within five years from the date of the Master Implementation-cum-Compromise Settlement from the proceeds of the sale of the “CG House” in Worli, Mumbai .
It also includes the transfer or replacement of non-funded facilities from the lenders to non-syndicated lenders or the company that procures and submits counter-guarantees for them.
Last month, the Competition Commission of India (CCI) approved the acquisition of shares in CG Power and Industrial Solutions Ltd by Tube Investments of India Ltd.
The proposed merger provides for the acquisition of more than 50 percent of the share capital of CG Power and Industrial Solutions Ltd (CG Power) by Tube Investments of India Ltd (TIIL).
TIIL is a publicly traded company and is part of the Murugappa Group. It has three business areas – mechanical engineering, metal formed products and bicycles. It is engaged in the manufacture of a wide range of products for the automotive, railroad, construction, mining and agricultural industries.
CG Power has two major businesses – Power Systems and Industrial Systems.
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Posted on: Sunday November 22nd, 2020 8:23 PM IST