Transaction with Apollo likely to complete by Aug: Welspun

Welspun Group will be recieving capital infusion of USD 500 million from PE Apollo Global Management to expand its presence in the global oil and gas pipe market (Read More).

From the total USD 500 million, USD 290 million would be pumped in Welspun Corp and the balance USD 210 million comprises two instruments; USD 60 million would come in Welspun Maxsteel. Apollo is also considering USD 150 million line of credit in Welspun Infratech. Welspun Group expects the transaction with Apollo to complete by August. Sanjay Patel, Managing Partner and Head of International Private Equity, Apollo Management elaborating on the deal said, "We are investing in a transaction split between a Compulsorily Convertible Debentures (CCD) at Rs 225 per share which is roughly 13% stake with a 5% coupon. The rest of the investment at the parent company in the form of non voting GDRs at Rs 225 per share." Akhil Jindal, Director, Welspun Corporation said, "We are very excited about this transaction and the way Apollo has supported us throughout. Apollo, being one of the largest private equity firm in the world, there are lots of synergies available." Below is the verbatim transcript of the interview with Anuj Singhal and Latha Venkatesh of CNBC-TV18. Also watch the accompanying videos. Q: Can you confirm it is 13.3% stake in the listed Welspun Corporation and you are paying Rs 225 per share for that? Patel: We are investing in a transaction split between a Compulsorily Convertible Debentures (CCD) at Rs 225 per share which is roughly 13% stake with a 5% coupon. The rest of the investment at the parent company in the form of non voting GDRs at Rs 225 per share. Q: Can you give us the break-up? How much you will be putting through this convertible debentures and any more details about when it converts- how many years. Patel: The total investment is Rs 1,305 crore & CCD is Rs 788 crore. The conversion is in 18 months and the rest of the investment at the parent which is Rs 517 crore is the non-voting GDRs. Q: Any reason that you have gone via the CCD route instead of straight equity route in terms of Welspun Corp? Patel: The CCD route is an attractive route to make an investment in the company. We are under the thresholds, so we don