Rain Commodities not to bid anymore for GLC Carbon

Hyderabad-based Rain Commodities’ wholly-owned North American subsidiaries, Rain USA and Rain Canada, have withdrawn as rival bidder to Oxbow’s proposal of C$14.00 per unit for acquiring the assets of the Toronto-based Great Lakes Carbon Income Fund. GLC Income Fund is a trust established to indirectly hold the securities of GLC Carbon USA, Inc., the world’s largest producer of both anode and industrial grade calcined petroleum coke. Rain Canada would receive a termination fee of C$17 mn (Rs. 64 crores) in cash from the fund prior to it actually entering into an agreement with Oxbow as required under the terms of its agreement with GLC Carbon Fund.

Rain USA stills retains the option to sell its indirect 20.22% stake in GLC Carbon, acquired in March 2006, as the fund is required to ensure that US-based Oxbow makes an offer to each stockholder of GLC Carbon to buy such equity interests.

Read the article in Business Standard.
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Rain, Oxbow bids C$13.50 for GLC Carbon; draws Rain Commodities into bidding war

Rain, Oxbow bids C$13.50 for GLC Carbon; draws Rain Commodities into bidding war

US-based Oxbow Carbon & Minerals Holdings, Inc. has bettered Rain Commodities’ offer of C$ 13.25 for the assets of Great Lakes Carbon Income Fund consisting of 73.56% ownership interest in GLC Carbon USA, Inc., the world’s biggest calcinated petroleum coke (CPC) maker.

Rain had acquired 20% ownership in the GLC Income Fund in March 2006 at an enterprise value for GLC Carbon at $656 mn. The company was looking at buying out the remaining equity and had entered into an agreement with the GLC Income Fund at a price of C$11.60 per unit. Oxbow entered the bidding on March 7 with an offer of C$13 per unit, forcing Rain to increase the bid to C$13.25. However, Oxbow seems to have bettered Rain’s revised bid with an offer of C$13.50 on Monday.

Oxbow is the world’s largest marketer of petroleum coke, a byproduct of oil refining, used in the production of electrodes for the steel and aluminum industries. Acquiring GLC Carbon will clearly give Oxbow a strangle-hold over the global market. Likewise for Rain, the acquisition means adding to its own substantial CPC capacity through wholly owned subsidiary Rain Calcining which will give it 28% market share in the West and a footprint across the Middle East, US and Argentina.

GLC Carbon has three plants in the US and one in Argentina. Rain has five days to make a revised offer. Oxbow also holds 5% equity in Rain Calcining which is set to be merged with the parent later this month. Rain stands to gain a break-up fee of C$17 mn in case GLC accepts another offer.

Read the article in DNA Money.
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Rain Commodities enters bidding war for GLC Carbon; raises bid price

Rain Commodities to buy Canadian carbon company for Rs. 1624 crores

Rain Commodities Limited is carrying out a leveraged buyout of Carbon Canada, Inc. for Rs. 1624 crores (Canadian $437 mn). Toronto-based Carbon Canada is a subsidiary of Great Lakes Carbon Income Fund (GLC Carbon). The acquisition would also include a 73.56% stake in GLC Carbon and certain unsecured subordinated notes of Huron Carbon ULC, a wholly-owned subsidiary of GLC Carbon.

Post-acquisition, Rain Commodities’ stake in GLC Carbon will scale up to 94% from the current 20.23%. Rain Commodities bought this stake from American Industrial Partners Capital Fund in 2006. Rain Commodities will also purchase the remaining stake in GLC Carbon from its management and other investors. Rain Commodities will conduct the transaction through its US-based wholly-owned subsidiary Rain Commodities US. The EV of the transaction is approximately Rs. 2513 crores (Canadian $767 mn). The transaction is expected to be close by June.

Citigroup Corporate and Investment Banking is advising Rain Commodities US on the transaction. Rain Commodities has secured bank financing from the ICICI Group and Citigroup to fund the proposed acquisition.

Great Lakes Carbon Income Fund is a trust established to hold indirectly the securities of GLC Carbon USA. The fund is listed on the Toronto Stock Exchange, Canada. GLC Carbon is the world’s largest producer of calcined petroleum coke (CPC) with annual production capacity of 2.3 mn tonnes a year.

Read the articles in The Economic Times and Business Standard.