- Sunday, January 05, 2025
Adani Enterprises holds 43.94 per cent stake in Adani Wilmar Ltd. It will sell 31.06 per cent stake to Wilmar International and the remaining holding will be sold in the open market
By: India Weekly
BILLIONAIRE Gautam Adani’s group on Monday announced its exit from FMCG joint venture Adani Wilmar by selling its entire stake to the Singaporean partner and in the open market for over $2 billion (£1.59bn) in a first major deal since the US bribery indictment.
In a statement, Adani Enterprises Ltd – which held 43.94 per cent stake in Fortune brand cooking oil, wheat flour and other food product maker Adani Wilmar Ltd – said it will sell 31.06 per cent stake to Wilmar International. The remaining about 13 per cent holding will be sold in the open market to meet minimum public shareholding requirements.
Adani will sell up to 403.7 million shares (31.06 per cent stake) to Wilmar at no more than ₹305 apiece to net ₹123.14 billion (£1.15bn). Adding the share sale through OFS, whose price will determined on the day of sales, the total proceeds will exceed $2 billion.
“With this, AEL (Adani Enterprises Limited) will fully exit Adani Wilmar Ltd,” it said. “Adani’s nominee directors will step down from the board of Adani Wilmar Ltd.”
Pranav V Adani, director of AEL and nephew of group founder and chairman Gautam Adani, and Malay Mahadevia will resign from the board upon execution of the agreement.
The transaction is expected to conclude before March 31, 2025.
Infra thrust
Proceeds from the stake sale will be used to focus on AEL’s core infrastructure businesses.
With this transaction, Adani has removed the liquidity perception overhang. This is the first major transaction post US federal prosecutors in November filing an indictment against group executives over a $265 million bribery to win renewable energy supply contracts. Adani group has denied the allegations as baseless and said it will seek legal recourse.
Adani Wilmar Limited (AWL) was established in January 1999 as a joint venture between the Adani Group and Singapore-based commodity trader Wilmar.
Each partner holds 43.94 per cent stake each, and they jointly control 87.87 per cent of Adani Wilmar, far above the maximum permissible limit of 75 per cent.
Market regulator Sebi rules mandate that large firms must have at least 25 per cent of shares available to the public within three years from listing.
Adani Wilmar makes Fortune brand cooking oil, wheat flour, pulses, rice and sugar. It owns 23 plants across 10 states.
In India, Wilmar Group also has a 62.48 per cent stake in Shree Renuka Sugars Ltd, one of the leading producers of sugar in the country.
As of Friday, December 27, 2024, Adani Wilmar had a market capitalisation of $5 billion (£3.99bn). During the last fiscal, it posted a consolidated total income of ₹515.55 billion (£4.80bn).
AEL, in the statement, said it will use “the proceeds from the sale to turbocharge its investments in the core infrastructure platforms in energy and utility, transport and logistics and other adjacencies in the primary industry”.
The funds from the stake sale will strengthen the incubation capacity of AEL and further sharpen the focus on consumer services under airports and Adani Digital. (PTI)
