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Saturday, Feb 25, 2006


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Corporate - Mergers & Acquisitions

Rain Calcining floats SPV for routing overseas investments

C.R. Sukumar

The game plan
The American company RCL seems to be eyeing is Great Lakes Corbon.
The markets agog with rumours that a line of credit of around $150 million from ICICI and IDBI has been obtained.
Wholly-owned s ubsidiary floated in Virgin Islands.

Hyderabad , Feb. 24

Amidst the market buzz that Rain Calcining Ltd (RCL) is close to acquiring an American calcining giant, the Hyderabad-based Rs 357-crore company has floated a special purpose vehicle (SPV) for routing its overseas investments.

While RCL is the Asia's largest CPC producer with a capacity of 4.8-lakh tonnes per annum, the American giant has over four times production capacity.

The deal, if materialises, would enable RCL emerge one of the largest calcining players in the world.

According to the market sources, the American company on which RCL is eyeing is the New York-based Great Lakes Corbon, which has four plants located in Texas, Oklahoma, Louisiana and Argentina with an aggregate annual capacity of 2.3 million tonnes.

The markets were also agog with rumours that Rain Calcining has obtained a line of credit of around $150 million from ICICI and IDBI for the acquisition.

When contacted, the RCL General Manager (Finance), Mr G.R. Chari, told Business Line that the company did float a wholly-owned subsidiary under the name and style of `Moonglow Company Business Inc' (MCBI) in British Virgin Islands as an international business company.

According to him, "the main objects of the wholly-owned subsidiary is to engage in the business of calcining metallic and/or non-metallic substances, including petroleum coke and needle coke and to invest in, and/or to acquire persons and/or entities engaged in the business of calcining metallic and/or non-metallic substances, including petroleum coke and needle coke."

Through the British Virgin Islands subsidiary, the company proposes to explore various opportunities to grow calcining business outside India.

"We are planning to route our overseas investments through this special purpose vehicle. We are seriously on the look out for overseas acquisitions and currently negotiating with several parties. We are evaluating couple of overseas opportunities to set up and/or acquire a calcining facility on its own or through a joint venture."

However, Mr Chari said the company has not entered into any definitive agreements or understandings with any party so far. Further, he said the company did not approach any financial institution or bank for raising funds for acquisitions. Having emerged as the successful bidder for a coke calciner project in Kuwait last year, Rain Calcining floated a joint venture to set up a manufacturing company in Kuwait with an annual capacity of 3.5-lakh tonnes.

The company has already placed all the equipment contracts and the joint venture project is currently under implementation. "We expect the Kuwait project to take off by mid of 2007," Mr Chari said.

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