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.