Blackstone-Piramal announce $ 1 b deal for glass manufacturing unit

• Piramal Glass says agreement signed to sell 56.4% stake in Lankan venture for SLRs. 13 b
• Post-announcement stock becomes most traded value wise

Piramal Glass Ceylon Plc said yesterday its Board has entered into a sale and purchase agreement with Pristine Glass Ltd., of India to divest 536.3 million shares or 56.45% stake in the Lankan venture to the latter for Indian Rs. 5.16 billion or SLRs. 13 billion.

Apart from the cash consideration the deal includes the indebtedness of the company, the net debt and working capital; adjustment to be computed as agreed as of the transfer of the glass manufacturing business of Piramal in India.

The completion of the transaction is subject to several conditions precedent which must be satisfied by both parties.

Post announcement Piramal Ceylon Glass  was the most traded stock at the CSE with a turnover of Rs. 1 billion involving 108.4 million shares. The share price gained by 80 cents or 9% to Rs. 9.50. The deal announced doesn’t trigger a mandatory offer in Sri Lanka but in recent weeks the share price of Piramal has been on the rise. It finished the September 2020 quarter at Rs. 4.20 after hitting a high of Rs. 4.50.

Piramal Glass makes container glass packaging with a capacity of 1,475 tons per day. It has factories in the USA, India, and Sri Lanka. 

Indian media reported that private equity major Blackstone has signed a deal to acquire Piramal Group’s Piramal Glass for around $ 1 billion.

The deal contour includes an upfront payment of $ 850 million while Piramal Group will get approximately $ 150 million on achieving certain milestones, to be paid over two years, said cnbctv18.com.

This will be the second billion-dollar deal by Piramal Group this year to capitalise the group which has a large NBFC arm. Earlier in the year, the group had sold US-based DRG for around a billion dollars. 

Piramal has taken many steps to raise funds via a rights issue, CDPQ investments, sale of a minority stake in Piramal Pharma to Carlyle.

Blackstone has a market value of $ 40 billion of assets in India, making it to the top 10 business groups in India. Blackstone has invested over $ 15 billion across Private Equity ($ 6.9 b), Real Estate ($ 7.8 b), and Tactical Opportunities ($ 400 m).

In 2019-20, Blackstone in India invested $ 6 billion across Private Equity ($ 2.5 b), Real Estate ($ 3.2 b) and Tactical Opportunities ($ 300 m). Blackstone’s recent transactions include a partial exit from Essel Propack.