Sanghi Industries' Shareholders Can Vote For Related-Party Transactions With Adani Group: InGovern
The synergies with Ambuja and ACC will have a positive impact on the liquidity position of Sanghi Industries, it says.
InGovern Research Services recommended shareholders on Tuesday to vote in favour of resolutions proposed by Sanghi Industries Ltd. for approval for related-party transactions with Adani Group companies.
The receipt of advance payment for confirmed bulk purchases from Ambuja Cements Ltd. and ACC Ltd. will translate into profit for Sanghi Industries, which is slated to have its extraordinary general meeting with its shareholders on Thursday, the advisory firm said in a release.
Acquisition Details
Ambuja Cements acquired Sanghi Industries in an all-cash deal last August, valuing the company at an enterprise value of Rs 5,000 crore. Initially, the Adani Group company acquired 14.7 crore shares, representing 56.74% of the overall shareholding, from Chairperson Ravi Sanghi, members of the Sanghi family and other promoter entities.
An additional 2.23% stake in Sanghi Industries was acquired on Dec. 5 and an open offer by Ambuja Cements to acquire a 26% stake held by minority shareholders of Sanghi Industries was launched on Jan. 15. The Adani Group company offered to buy more than 6.71 crore shares of the Gujarat-based cement maker at Rs 114.22 apiece, aggregating to about Rs 818.7 crore as a part of the open offer.
Extraordinary General Meeting
The extraordinary general meeting for Sanghi Industries is scheduled to be held to address important matters regarding the acquisition that require the approval of the company's shareholders.
The resolutions seek shareholder approval for related-party transactions with Adani Enterprises Ltd., Ambuja Cements, ACC and its group companies.
InGovern View
In an industry that requires optimum capacity utilisation to ensure good margin, Sanghi Industries' capacity is grossly underutilised. Therefore, the advance payment receipts for bulk purchases from the Adani Group will help with Sanghi Industries' profit, according to InGovern.
The advisory firm recommends shareholders to vote in favour as the approval sought by Sanghi Industries is for a defined period and for routine business transactions. "Being two of India's largest cement companies, the synergies with Ambuja and ACC will have a positive impact on the liquidity position of Sanghi Industries."
The related-party transactions with Adani Enterprises will ensure a consistent supply of superior-quality solid fuels to Sanghi Industries.
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