Mining billionaire Anil Agarwal- led Vedanta ltd on Wednesday announced acquisition of a controlling stake in Japanese glass substrate manufacturer AvanStrate Inc from global private equity firm Carlyle Group. Its wholly owned subsidiary Cairn India Holdings ltd (CIHl) will invest $158 million in AvanStrate as part of the transaction which also includes taking over debt and extending a loan, the company said.
It will take over AvanStrate’s debt of $151 million from the firm’s lenders and extend $7 million as a loan. The face value of AvanStrate’s debt is $299 million, which means its lenders are taking a haircut. In return, CIHl will get a little over 51 per cent stake in AvanStrate “for a nominal consideration from Carlyle Group”, the statement said. AvanStrate is majority-owned by Carlyle. Its other major shareholder is optical products maker Hoya Corporation.
“Through a combination of these elements, this transaction provides both strategic control and attractive returns to CIHl,” it said, adding the acquisition is subject to consents being obtained from AvanStrate’s lenders by end of the month. Agarwal has been keen on entering lCD manufacturing business and had in February last year announced setting up India’s first integrated lCD module manufacturing facility in Nagpur at an investment of $10 billion in five phases.
The investment in AvanStrate may give a fillip to the project. AvanStrate, the statement said, makes glass substrates for small and medium-sized high resolution thin film transistor liquid crystal display (lCD) panels, which are used in screens for devices including smartphones, cameras, flat screen televisions and tablets.