Mining billionaire Anil Agarwal-led Vedanta Ltd is set to acquire a controlling stake in Japanese glass substrate manufacturer AvanStrate Inc from global private equity firm The Carlyle Group.
Vedanta said in a stock-exchange disclosure on Wednesday that its wholly owned subsidiary Cairn India Holdings Ltd will invest $158 million (Rs 1,013.5 crore) in AvanStrate as part of the transaction.
This includes taking on AvanStrate’s debt of $151 million from the company’s lenders and extending $7 million as a loan. The face value of AvanStrate’s debt is $299 million, which means its lenders are taking a haircut.
Cairn India will acquire a stake of a little more than 51% in AvanStrate for a nominal consideration from Carlyle Group, according to the disclosure.
AvanStrate is majority-owned by Carlyle. Its other major shareholder is optical products maker Hoya Corporation.
The acquisition is subject to consents being obtained from AvanStrate’s lenders, Vedanta said.
Vedanta is a diversified natural resources company and produces oil and gas, zinc, lead, silver, copper, iron ore, aluminium and power. Vedanta Ltd is the Indian subsidiary of London-listed Vedanta Resources Plc.
The investment in AvanStrate may give a fillip to project proposed by Agarwal-promoted Twinstar Display Technologies Ltd to set up an integrated LCD module manufacturing unit in Nagpur.
AvanStrate makes glass substrates for small and medium-sized high resolution thin film transistor (TFT) liquid crystal display (LCD) panels, which are used in screens for devices including smartphones, cameras, flat screen televisions and tablets. Glass substrate is made of silicon and metallic oxides.
The Japanese company was established in 1991 as an equal joint venture between general glass manufacturer Nippon Sheet Glass Co. Ltd and Hoya Corp. It was formerly known as NH Techno Glass Corp.
Carlyle, which had $174 billion of assets under management as of 30 September 2017, had acquired a majority stake in NH Techno Glass in 2008 in a transaction where Nippon Sheet exited. According to media reports, the private equity firm had acquired a majority stake for $560 million.
AvanStrate’s revenue stood at $169 million and made a net profit of $1.4 million in the year through March 2017.
Nomura acted as the financial adviser to Cairn India on this transaction.