Reliance Infrastructure of Anil Ambani group acquires Pipavav Defence and Offshore Engineering Company.

Wednesday, March 4, 2015

Mumbai: Reliance Infrastructure Limited today announced the acquisition of Pipavav Defence and Offshore Engineering Company Limited, together with sole management control.

Reliance Infrastructure , together with its wholly owned subsidiary Reliance Defence Systems Private Limited, has agreed to acquire from the Promoters of Pipavav Defence 13,00,00,000 equity shares representing approx. 18% shareholding in the Company at a price of Rs. 63 per Share, aggregating Rs. 819 crore. This is the largest ever acquisition in Defence sector in India.

Pursuant to this acquisition resulting in a change in management control of the Company, Reliance Defence Systems Ltd., a subsidiary of Reliance Infrastructure Ltd. has issued a Public Announcement to make a mandatory open offer to acquire 26% shares from the public shareholders of the Company, at a price of Rs. 66 per share, in terms of applicable SEBI Takeover Regulations.

As per the agreement with the Promoters, Reliance will also acquire from them such number of additional equity shares of the Company, at the same price of Rs. 63 per share, as is required to ensure that Reliance’s shareholding is not less than 25.10% after taking into account the acquisitions made under the Open Offer.

Post the transaction, the existing promoters of Pipavav Defence will continue to retain a minority stake in the Company, together with two non-executive Board seats.

The transaction is subject to certain conditions precedent and various statutory approvals, etc.

Post completion of the transaction, Mr. Anil D. Ambani, Chairman, Reliance Group, will become Chairman of the Company.

Commenting on the transaction, Mr. Ambani said “This is a unique opportunity for Reliance Group to participate in Prime Minister Mr. Narendra Modi’s “Make in India” programme for the high growth defence sector.”

Mr. Ambani added, “We are confident that our strategic investment will create long term value for all stakeholders.”

Mr. Nikhil Gandhi, the founder promoter and Chairman of Pipavav Defence and SKIL, stated, “This transaction is an endorsement of the vision we set out to achieve almost 10 years ago. Aside from the commonality of vision, we share a philosophy of long-term value certain for all stakeholders. I look forward to supporting Reliance to realize the goal of creating India’s foremost defence company, with an emphasis on the ‘Make in India’ programme initiated by the Hon’ble Prime Minister of India.”

Mr. Bhavesh Gandhi, co-promoter and Vice Chairman of Pipavav Defence stated, “ I expect Reliance’s strategic investment to accelerate our progress towards meeting the needs of our Nation, and creating sustainable social value in the community we operate in.”

JM Financial Institutional Securities Limited is the sole financial advisor and the Manager to the Open Offer.

Reliance Infrastructure Limited:

Reliance Infrastructure Ltd (Rinfra) is amongst the largest infrastructure companies in India, developing projects through various Special Purpose Vehicles (SPVs) in several high growth sectors within the infrastructure space ie. Roads, Metro Rail and Cement.

RInfra is also a leading utility company, having presence across the value chain of power businesses ie. Generation, Transmission, Distribution and Power Trading.

Pipavav Defence and Offshore Engineering Company Limited

Pipavav Defence is a world class integrated defence production, ship building and offshore infrastructure company which received the license and contracts to build frontline warships for the Indian Navy.

Pipavav Defence has one of the world’s largest Infrastructure facilities – spread over 841 acres of land on the West Coast of India (Gujarat), Gulf of Cambay, with 210 acres of fully developed water front land and 250 acres developed for shipbuilding.

Pipavav Defence has large dry docks, measuring 662 meters in length and 65 meters in width. The second dry dock measuring 750 meters in length and 60 meters in width is under development.

Strong Partnerships with Global Players

Pipavav has partnerships and Technology transfer agreements with major global plyers like SAAB Technology AG, Sweden, DCNS (France), Sembcorp Marine (Singapore),

JSC Zvyozdochka, Rosoboron Export, Russia, AtlasElektronik, part of Atlas Elektronik GmbH and Sagem Defence Securite, part of Sagem Group,