Sanghi Inds set to buy out Rs 500 cr of Kotak bonds early

Sanghi Industries, the company acquired by Adani-owned Ambuja Cements, is set to buy out ₹500 crore bonds from Kotak Special Situations Fund a year ahead of maturity.

Last November, the listed cement maker had raised the sum through non-convertible debentures at 16-17% interest rate from Kotak Special Situation Fund for an 18-month period, and financing was secured against the company's assets and shares.

The fund was utilised to reduce the company's debt, including prepayment of term debt amounting to ₹210 crore and reduction of working capital debt of ₹100 crore.

"Kotak Special Situations Fund will be paid ahead of the maturity as this was a kind of bridge finance for the promoter," said a source.

A Kotak spokesperson declined to comment.

On August 3, Ambuja Cement entered an agreement to acquire up to 56.74% of the equity share capital of Ravi Sanghi-led Sanghi Industries, based in Gujarat, and certain members of the promoter group with an enterprise value of ₹5,000 crore, including debt of the company. The company's shares are trading at ₹111 on the Bombay Stock Exchange. The deal is expected to close in 3-4 months, subject to approvals, including approvals from the Competition Commission of India.

Following the acquisition of 56.74%, Ambuja Cements has made an open offer of ₹767 crore to buy out an additional 26% stake. As of March 31, 2023, the total financial indebtedness of Sanghi Industries, including short and long-term debt, stood at ₹1,530 crore.

The company had previously requested NCD holders for a deferment of interest payment.

The company has presence in Gujarat, Rajasthan, Maharashtra, Madhya Pradesh and Kerala in the domestic market. It also exports clinker and cement. Its clinker capacity is 6.6 MMTPA, cement capacity 6.1 MMTPA, showed the company's website.