Cyril Amarchand Mangaldas Advises Murugappa Group on its Acquisition of a Controlling Stake

MUMBAI:
Cyril Amarchand Mangaldas, India’s largest corporate law firm, advised Murugappa Group in the acquisition of a controlling stake in CG Power & Industrial Solutions Limited (“CG Power”). Tube Investments of India Limited (Tube Investments), part of the Murugappa Group, has acquired controlling interest in CG Power and entered into agreements for settlement of lender liabilities through a binding swiss challenge bid under RBI’s directions for resolution of stressed assets.

The transaction involved preferential allotment of shares and warrants to Tube Investments under the new SEBI Regulation [Regulation 164A of the SEBI (Issue of Capital and Disclosure Requirements) Regulations, 2018], for resolution of stressed assets and settlement of existing debt of CG Power.

Tube Investments had entered into securities subscription agreements with CG Power for subscription through preferential allotment of equity shares and warrants of CG Power to acquire majority stake in CG Power.

The transaction is a landmark one being the first one under new SEBI regime for preferential allotment for distressed companies and was the first swiss challenge debt resolution of a listed company enabling a path for successful revival of CG Power.

The General Corporate, Financing, Taxation and Disputes teams of Cyril Amarchand Mangaldas advised on the transaction.

The transaction was led by L. Viswanathan (Partner). The Corporate team was led by Gautam Gandotra (Partner) with support from Arnav Shah (Principal Associate) and Ananya Pandit (Associate). The Financing Team was led by Amey Pathak (Partner), with support from Varun Singh (Senior Associate). The Taxation and Disputes advisory was provided by SR Patnaik (Partner), and Faraz Sagar (Partner) respectively.

The preferential allotment of equity shares and warrants is valued at INR 800 crores approximately. The debt resolved is INR 4000 crores approximately. Other Parties and Advisors to the Transaction included Arpwood Capital (advisors to the Deal) and SBI Caps (financial advisors for the lenders).

For this transaction, the primary agreement for subscription was signed on August 7, 2020 and Tube Investments has taken over CG Power on November 26, 2020.

Cyril Amarchand Mangaldas takes forward the values going back 103 years, of the erstwhile Amarchand & Mangaldas & Suresh A. Shroff & Co., whose pre-eminence, experience and reputation of almost a century has been unparalleled in the Indian legal fraternity. Tracing its professional lineage to 1917, the Firm of Cyril Amarchand Mangaldas is now the largest full-service law firm in India, with over 750 lawyers including over 130 partners, and offices in India’s key business centres at Mumbai, New Delhi, Bengaluru, Hyderabad, Chennai and Ahmedabad. The Firm advises a large, and varied client base that includes domestic and foreign commercial enterprises, financial institutions, private equity funds, venture capital funds, start-ups and governmental and regulatory bodies.

The firm, Cyril Amarchand Mangaldas, was awarded recently awarded with “India – Firm of the Year” at the AsiaLaw Regional Awards 2019 and “India Deal Firm of the Year” at the In-House Community Counsels of the Year Awards 2019. The firm was also named as the “Most Innovative National Law Firm of the Year – India for 2018” at the IFLR Asia Awards, having also been successful in winning the prestigious & coveted “National Law Firm of the Year, 2018 for India” at the Chambers Asia-Pacific Awards. The firm was also voted as the “Employer of Choice for 2018” from India, by the Asian Legal Business, now 4 years in a row, building upon the several awards that the erstwhile Amarchand & Mangaldas & Suresh A. Shroff & Co. had won in the past.