Rain Commodities acquires 73.56% in GLC Carbon

New Delhi, Feb 5: Rain Commodities today said it will acquire 73.56 per cent stake in the United States-based leading calcined petroleum coke producer GLC Carbon from Toronto's Great Lakes Carbon Income Fund for 437 million dollars in cash.

The company's 100 per cent subsidiary Rain Commodities (US) Inc already has 20.23 per cent equity interest in GLC Carbon. While 3.37 per cent of GLC Carbon company is held by by management, the remaining 2.84 per cent is in possession of a third party holder.

Rain Commodities (US) has entered into an agreement with the Toronto Stock Exchange-listed fund for the transaction as well as to purchase a certain number of 16 per cent unsecured subordinated notes of the latter's wholly-owned subsidiary Huron Carbon ULC.

''The company has also agreed to complete the purchase of 3.37 per cent of ownership interest in GLC Carbon US from its management contemporaneously with the closing of the transaction as per the definitive agreement. Rain Commodities (US) Inc also intends to acquire the balance 2.84 per cent interest from the third party holder,'' a company statement said.

Rain Commodities (US) Inc purchased the 20.23 per cent share in GLC Carbon from American Industrial Partners Capital Fund II in March last year. Since then the latter has been in talks with GLC Carbon USA regarding the potential acquisition of the 73.56 ownership. GLC Carbon produces calcined petroleum coke (CPC) at its facilities located in Port Arthur, Enid and Baton Rouge in the United States and in La Plata, Argentina, with an aggregate capacity of 2.34 million tonnes per annum.

The proposed transaction, subject to regulatory approvals and other customary closing conditions, is expected to close at the end of the first quarter of 2007.

The Great Lakes Carbon Income Fund has set February 19, as the record date for a special meeting of unitholders to approve the terms of the proposed transaction and the fund's winding up. The fund is a trust established to hold indirectly the securities of GLC Carbon US Inc.

The special meeting of the unitholders is expected to be held by the end of March, 2007.

A termination fee of 14.5 million Canadian dollars is payable to Rain by the fund under certain circumstances, the company said.

Citigroup Corporate and Investment Banking is acting as financial advisor and Stikeman Elliot LLP and Kramer Levin Naftalis&Frankel LLP are acting as legal counsel to Rain Commodities (US) Inc.

Hyderabad-based Rain Commodities, earlier known as Priyadarshini Cement, is engaged in CPC business through Asia's leading producer of anode and industrial grade CPC -- Rain Calcining Ltd -- in which it has 0.77 per cent stake. Rain Commodities (US) has 4.99 per cent in Rain Calcining.

Considering the growing demand for CPC in the Indian market, the company has also decided to set-up a greenfield CPC plant with 2,40,000 tonnes per annum capacity along with a co-generation power plant of 25 mw in Visakhapatnam in the next 18 months.

''The proposed transaction and the greenfield CPC plant are in line with our strategy to create global CPC assets across various geographical regions,'' the company said in a statement.

UNI