Hyderabad, 28th August 2007 – Nagarjuna Construction Company Limited (“NCC” or the “Company”), a leading Indian construction company, today announced that its Board of Directors has approved an investment of US$ 150 million by The Blackstone Group funds. NCC will raise US$ 150 million through a fresh issue of shares and convertible warrants. Blackstone will have representation on the Board of NCC. Kotak Investment Banking and SSKI acted as the investment banking advisors to the Company and Blackstone, respectively, in the transaction.
Founded in 1978 by Mr. AVS Raju and currently led by his son, Mr. A Ranga Raju, NCC is the third largest construction services company in India, and through its subsidiaries owns several infrastructure assets on a build-operate-transfer basis. Its construction services business operates in the road, water, buildings, electrical works and irrigation segments, and the Company recently expanded into the power, oil and gas, and metals segments. The Company is listed in India on the Bombay Stock Exchange under the ticker symbol (NAGARCON) and on the National Stock Exchange under the ticker symbol (NAGARCONST).
Commenting on the deal, Mr. A Ranga Raju, Managing Director, NCC stated, “We welcome Blackstone as a long term partner. With its global reach and proactive approach, Blackstone brings immense value to the Company. This investment will not only allow us to make additional investments in public-private infrastructure projects, but will also expand our capital base, enabling us to bid for larger projects going forward and strengthening our strategic positioning in the market.”
Mr. Akhil Gupta, Chairman and Managing Director of Blackstone Advisors India Private Limited, stated, “We believe that planned infrastructure expenditure, economic growth, and urbanization will drive long term growth in India’s construction sector. It is a privilege to invest alongside a superb management team in a leading company in one of India’s accelerating growth sectors. We look forward to supporting the continued growth of the Company as it delivers on its long-term growth plan.”
Blackstone funds will invest equity capital in the Company in two tranches. Blackstone will be allotted 20,246,900 equity shares of Rs.2/- each at a premium of Rs.200.50 (equivalent to approximately US$ 100 million) and 9,111,111 warrants (with an exercise period of 18 months) of Rs.225/- per warrant, with each warrant convertible into one equity share of Rs.2/- each at a premium of Rs.223/- (equivalent to approximately US$ 50 million).
An Extraordinary General Meeting of the members of the Company is scheduled for 24th September, 2007 in order to obtain the approval of the members of the Company for the aforementioned issuance of shares and warrants on a preferential basis.
About The Blackstone Group
The Blackstone Group (NYSE:BX) is a leading global alternative asset manager and provider of financial advisory services. Its alternative asset management businesses include the management of corporate private equity funds, real estate opportunity funds, funds of hedge funds, mezzanine funds, senior debt funds, proprietary hedge funds and closed-end mutual funds. The Blackstone Group also provides various financial advisory services, including mergers and acquisitions advisory, restructuring and reorganization advisory and fund placement service.