Singapore NG valued at $1.26bn
Hyderabad-headquartered Nava Ltd’s Board has accepted a proposal of buyback from Nava Global Pte Ltd (NG), its wholly-owned subsidiary in Singapore to improve capital efficiency, optimising returns, and enhancing shareholder value http://sgx.com.
CEO and Managing Director Ashwin Devineni said 5 Jan, “This transaction underscores our focus on disciplined capital allocation and long-term value creation. By unlocking capital from a mature subsidiary and redeploying it in line with our strategic priorities, we are improving capital efficiency, optimising returns, and enhancing shareholder value, while maintaining the financial strength and growth prospects of our businesses.”
NG, having considered its financial position, dividend distribution policy, capital commitments and cash flows, has decided to utilize the surplus cash to the extent of US$50 million for buyback of shares from the Company https://www.bseindia.com/.
Strategic Rationale:
The buyback will achieve the following for Nava:
• Part monetisation of Nava’s investment in NG
• Efficient utilisation of accumulated free reserves of NG
• Augmenting liquidity to pursue new acquisitions and new/ongoing projects.
The buyback consideration was determined based on an independent fair equity value of NG at US$1.26 billion.
Summary of buyback transaction:
1. Quantum of buyback: 99,20,635 equity shares out of 249,743,731 shares of One Dollar each held by Nava in NG, comprising 16,870 shares of S$1 each and 249,726,861 shares of US$1 each.
2. The buyback price is US$5.04 per share against Book value of US$1.20 per share, based on an independent fair equity value of US$1.26 billion https://www.nseindia.com/.
3. The total consideration for Nava Ltd, is US$50 million, equivalent to around Rs.450 crore, (calculated at an exchange rate of Rs.90 per US$, subject to change).
4. The consideration, after historical cost of investment for 99,20,635 shares of Rs. 48.33 crore (computed on a FIFO basis), would be subjected to long term capital gains tax in the hands of Nava Ltd.
5. There is no impact on voting rights of the Company in NG or in any downstream subsidiaries, post buy-back https://sbi.com.in/.
Founded in 1972, Nava Limited is a publicly listed multinational corporation with interests in metals, energy, mining, healthcare, and commercial agriculture. As one of India’s leading ferroalloy producers, Nava also operates Zambia’s largest mine-to-mouth power plant. Expanding its global presence, Nava is investing in commercial agriculture in Zambia and in healthcare in Southeast Asia. Fiinews.com
