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Hyderabad-based Rain Commodities’ wholly-owned North American subsidiaries, Rain USA and Rain Canada, have withdrawn as rival bidder to Oxbow’s proposal of C$14.00 per unit for acquiring the assets of the Toronto-based Great Lakes Carbon Income Fund.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 enters bidding war for GLC Carbon; raises bid price

Rain Commodities has entered into a bidding war for the acquisition of GLC Carbon USA and has raised its bidding price from the earlier C$11.60 per share to C$13.25. The acquisition is being effected through Rain Commodities’ wholly-owned subsidiary, Rain Commodities USA Inc.

This raises the effective price for the acquisition of 73.56% in GLC from Rs. 1624 crores to Rs. 1873 crores. The hike in price is in view of the competitive bid for GLC made by Oxbow Carbon and Minerals Holdings, Inc, which offered a price of C$ 13.00 per share.

Under the amended agreement, the termination fee has also been increased from C$ 14.5 mn to C$ 17 mn. The termination fee will be payable to Rain Commodities by the GLC Income Fund, the holding company of GLC Carbon, in case a third party shows interest in buying GLC Carbon and the deal turns in favour of the third party.

The acquisition of GLC Carbon will make Rain Commodities the world’s largest producer of Calcined Petroleum Coke (CPC) with a total capacity of 2.43 mn tonnes per annum. The acquisition would be funded by a mix of debt, internal accruals and funds raised through QIP. Rain Commodities is also planning to merge group company, Rain Calcining, which is into CPC production, with itself to achieve business synergies.

Read the article in The Economic Times.
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Rain Calcining to merge with Rain Commodities