Blackstone invests $100 mn in International Tractors Ltd

Mumbai: The Blackstone Group today announced that its affiliate Blackstone Capital Partners (Singapore) has signed an agreement to acquire 12.5% of International Tractors Limited (ITL) in a structured transaction for up to USD 100 million (Rs 520 crores). The flagship company of the Sonalika Group, ITL is a leading manufacturer of tractors under the brand name 'Sonalika'.

Incorporated in 1995, ITL has grown to have an annual turnover of USD 500 million. It currently has 10% share of the domestic tractor market. In addition, ITL exports tractors to over 70 countries worldwide. The company aims to grow its position in India as well as expand its presence in the global markets.

Mr. L. D. Mittal, chairman, ITL, said: "Blackstone in India has an exceptional track record in partnering with companies during their growth phase. We have already witnessed the value-addition that they bring to us. Their strategic inputs will further enable us to achieve our ambitious growth plans.

In addition to helping us scale up our operations, this deal will provide us access to Blackstone's global best practices." "ITL is intrinsic to India's efforts in enhancing agricultural productivity and enriching its farmers.

Favourable macro-economic trends such as rising minimum support prices and rising labour costs are leading to increased adoption of mechanization by farmers. ITL's cost-effective manufacturing facilities with deep value engineering and strong product development capabilities provide it with a competitive advantage to capture this market.

Customers identify with the Sonalika brand for its product strength and commitment to the consumer. Further, ITL's tractors are in great demand in international markets as well," said Akhil Gupta, Senior Managing Director and Chairman of Blackstone India. Delhi-based SSV Fincorp Services led by its CEO, Amit Tandon, was the exclusive advisor for this transaction.

Blackstone, Carlyle set to buy Anil Ambani's RCOM towers

MUMBAI: Reliance Communications (RCOM) has entered into exclusive negotiations with private equity consortium of Blackstone and Carlyle to sell its tower unit, with a deal likely to happen by December, said a source directly familiar with the process. The transaction is expected to value the tower asset in excess of $3.5 billion making it India's largest PE deal till date. Blackstone is likely to be the lead investor in the buyout transaction for which discussions were now advanced. Anil Ambani-controlled RCOM may conclude a tower sharing deal with his elder brother Mukesh Ambani-owned Reliance Infotel ahead of the tower unit sale which could buoy the PE investors. "We have shortlisted Blackstone and Carlyle consortium from three initial bids, and we are talking only with them for the sale of tower unit. The commercial offer has come and we hope to close the transaction by December," said the source mentioned earlier. This source, however, declined to discuss valuation of the tower unit with 50,000 odd towers. TOI first reported that Blackstone and Carlyle were evaluating a joint bid for the tower unit, which was put on the block with parent RCOM wanting to retire a substantial part of the Rs 32,000 crore debt on its books. A second source said tower sharing deal with the Mukesh Ambani firm may help the valuation of the tower unit for which the private equity consortium had offered a base price of $3 billion. "The tower sharing deal is most likely to boost the valuation," he said, as RCOM may be eyeing a deal at around $4 billion. Mukesh Ambani's Infotel holds pan Indian spectrum for broadband wireless access, which it had won last year, and now wants to start a major roll out next year. It would make an upfront payment of around $100 million as part of this long-term tower sharing arrangement. A spokesperson for RCOM declined to comment on speculation. RIL too refused comment. The tower sharing will strengthen the tenancy ratio-the number of tenants per tower-of RCOM's tower unit, which stands at 1.74. A tower company can have more than one operator as a tenant which basically determines its profitability. An industry player says a tower company can double its tenancy ratio without making any capital expenditure. Getting on board Reliance Infotel as a tenant can easily take up the crucial tenancy ratio depending on the number of towers that are leased out. An analyst tracking the telecoms sector, on conditions of anonymity, said that tower unit's tenancy ratio, which is rather moderate right now, can easily move up to over 2 if all the towers are leased out to RIL. "It is not very difficult to have a ratio of 3 but Indian tower companies have not been able to do that successfully." Typically, a monthly rent of Rs 20-25,000 is charged by tower companies to rent out their infrastructure to operators in India depending on the location of the towers.