Tube Investments to take control of CG Power for Rs 700 cr

On Friday, CG Power and Tube Investments entered into a securities subscription agreement (SSA) for the issuance and allotment of securities to the latter on a preferential basis, CG Power and Industrial Solutions Ltd said in a regulatory filing. The transaction would include investment of around Rs 550 crore for primary subscription to the equity shares, and investment of around Rs 150 crore for primary subscription to warrants. These will be convertible into equivalent number of equity shares at the option of Tube Investments within 18 months from the allotment. Out of the total investment amount for the warrants, 25 per cent will be paid upfront at the time of subscription of the warrants.

CG Power is undergoing financial stress and its lenders have initiated the process for resolution of its stress under the Stressed Asset Directions. The acquisition would be completed before 120 days from the date of the Securities Subscription Agreement, Tube Investments said its regulatory filing.