City Gas Distributor Mahanagar Gas Ltd., announced the acquisition of 100% stake in Unison Enviro Pvt. Ltd., it said in an exchange filing. This is the first ever strategic acquisition that the company has made.
The company has acquired 100% equity shares of Unison Enviro for a cash consideration of ₹562.09 crore, post which, Unison Enviro will become a wholly-owned subsidiary of MGL.
Further, the company has also agreed to provide a corporate guarantee to lenders of UEPL to assure the due performance and compliance of terms of borrowings by the acquired company. Under this, the company has executed a deed of guarantee in favour of the security trustee to assure the due performance, compliance of all terms and conditions and covenants of a rupee termm loan facility for an aggregate principal amount not exceeding ₹543 crore and a working capital facility not exceeding ₹23 crore.
The strategic acquisition, according to Mahanagar Gas, solidifies its commitment to its long-term growth strategy.
MGL completed the acquisition on Thursday after getting approval from the Petroleum and Natural Gas Regulatory Board (PNGRB) in December last year. Prior to this deal, Ashoka Buildcon and an investment fund managed by Morgan Stanley India Infrastructure (MSII) held equity stake in UEPL.
"It (UEPL acquisition) will not only help expand our core business of City Gas Distribution but will also help UEPL in ensuring a higher growth trajectory by leveraging deep domain knowledge, optimisation of cost structure through possible integration and synergies," Ashu Shingal, MD of Mahanagar Gas said.
The share purchase agreement was signed between the parties in March last year where HDFC Bank served as the transaction advisor to MGL, while Kotak Mahindra Capital was the advisor to Ashoka Buildcon and MSII.
MGL has also diversified its energy portfolio by setting up Mahanagar LNG Pvt. Ltd. It is also working with Mumbai's civic body, the BMC to set up one of the largest biogas plants based on municipal solid waste in Mumbai.
"Hydrogen, EV, Renewables are adjacent areas for MGL to expand its energy portfolio for which the company is actively engaged in exploring opportunities to fuel its growth," MGL said in a statement.
Shares of Mahanagar Gas ended 0.8% lower at ₹1,467 on Thursday.
Check out our in-depth Market Coverage, Business News & get real-time Stock Market Updates on CNBC-TV18. Also, Watch our channels CNBC-TV18, CNBC Awaaz and CNBC Bajar Live on-the-go!
BJP is planning to ban RSS, says Shiv Sena (UBT) chief Uddhav Thackeray
May 18, 2024 8:01 PM
Punjab Lok Sabha elections: Complete list of Congress candidates
May 18, 2024 4:08 PM
Punjab Lok Sabha elections: Check full list of AAP candidates and constituencies
May 18, 2024 12:59 PM
PM Modi, Rahul Gandhi election rallies in Delhi today: Here are the routes to avoid
May 18, 2024 11:28 AM