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MOTLEY COLLECTION OF BUSINESS AND ECONOMIC NEWS |
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BUYOUT
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 Essar buys Algoma for US$ 1.6 billion
Essar Global announced the acquisition of Canadian steel major Algoma in an all-cash deal worth $1.6 billion (nearly Rs 6,800 crore). The acquisition would take place through the wholly owned subsidiary, Essar Steel Holdings. Algoma supplies sheets to US carmakers including General Motors Corp and Ford Motor Co.
Essar Global offered C$56 (Rs 2087.63) a share for the Canadian company, a 48 per cent premium over its 20-day average ended February 14, or seven times Algoma’s EBITDA. Tata Steel paid nine times the earnings of Corus group, analysts said.
Algoma had announced on February 14 that it was engaged in talks with buyers that may lead to a change in management control.
The Algoma board backed the offer, which required the approval from at least 66 per cent of the shareholders, according to the Canadian laws.
UBS is the adviser to Essar Global. Essar Global Chairman Shashi Ruia said in a statement: “We believe Algoma is an excellent addition to our existing steel business and also offers growth potential. This acquisition fits in with our global steel vision of having world-class, low-cost assets, with a global footprint,” he said.
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| INFRASTRUCTURE |
Ras Al Khaimah to invest $4.8 billion in Tamil Nadu
Ras Al Khaimah (RAK), the fourth largest of the seven emirates forming the United Arab Emirates (UAE), has identified Tamil Nadu for its mega investments and is expected to invest to the tune of Rs 20,000 crore in developing infrastructure and feeder townships.
The Ras Al Khaimah Investment Authority (RAKIA) has identified two projects, one each at Coimbatore and Kadalur in Kancheepuram district to invest about Rs 20,000 crore in residential township projects.
However, RAKIA is expected to invest about Rs 2,000 crore in the initial phase. The land for the two projects is being purchased privately by the promoters. A memorandum of understanding was signed recently by S Ramasundaram, chairman and managing director, Tamil Nadu Industrial Development Corporation (Tidco) and Khater Massaad, chief executive officer of RAKIA, in the presence of Tamil Nadu chief minister M Karunanidhi for implementing the above projects, according to a government release.
The Coimbatore project would come up in an area of 1,000 acres and would have an IT SEZ supported by an integrated township, which will have social infrastructure, including a golf course, malls, a resort, spa, and single and multi-family homes with international standards.
This project, which is expected to be completed in five years.
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June 2007
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