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Grapevine: Brookfield, others eye Mphasis; Lakshmi Mittal, others circle Uttam Galva

Private equity firms Brookfield, Bain Capital, Carlyle, and UK-based Permira have initiated due diligence for buying a controlling stake in Blackstone-backed tech firm Mphasis, reports said.

Blackstone is looking to cash out of its largest investment in the country till date, The Economic Times report said citing people aware of the matter. Morgan Stanley has been appointed by Blackstone for the sale.

The investors are expected to submit the final binding offers next month, though a specific date has not yet been finalised, the people said.

Blackstone’s 56.16% stake alone would be valued at Rs 16,060.6 crore ($2.2 billion) based on the company’s current market value. A sale will trigger an open offer for an additional 26%, which, if successful, can lead to the acquirer controlling more than 80% of the company in a deal that could cost about Rs 22,900 crore ($3.1 billion). That would make it the largest technology deal in the country till date.

Meanwhile, Lakshmi Mittal, brothers Sajjan and Naveen Jindal, and Anil Agarwal (of Vedanta) have shown interest in Uttam Galva Steels, which has been put on the block by lenders, The Times of India said.

Phoenix Asset Reconstruction Company (ARC), owned by Kotak Mahindra, has also thrown in its hat for Uttam Galva.

Vedanta, said sources, has routed its interest in Uttam Galva through ESL Steel, a company it acquired through the bankruptcy route in 2018.

In March 2020, State Bank of India (SBI) had initiated bankruptcy proceedings against Uttam Galva at the Mumbai bench of the National Company Law Tribunal (NCLT) after it defaulted on an external commercial borrowing of $6.7 million. 

Six months later, the NCLT admitted SBI’s petition and appointed Milind Kasodkar of law firm KMDS & Associates to oversee Uttam Galva’s affairs and conduct its bankruptcy proceedings.

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