One of India’s leading consumer goods companies- Adani Wilmar, a joint venture between India’s Adani Group and Singapore’s Wilmar International is not coming to an end as Adani Enterprises, the former’s flagship company has announced its plans of selling a 13% stake in Adani Wilmar.
This $2 billion worth divestment of Adani Enterprises in Adani Wilmar- the JV between Adani Enterprises and Wilmar International comes at a time when the U.S. authorities have accused Adani Group’s founder Gautam Adani and a few other top company executives of being party to a scheme that paid bribes worth $265 million to secure Indian power supply contracts. However, the Adani group has already dismissed these charges by calling them “baseless”.
According to reports, with Adani Group’s flagship company- Adani Enterprises deciding to sell its 13% stake in Adani Wilmar to comply with India’s minimum public shareholding requirements, Singapore’s Wilmar will acquire Adani’s remaining 31% stake at a price not exceeding Rs 305 per share.
Since the transaction value of Adani Group’s portion in the JV being sold to Wilmar is $1.44 billion, the proceeds from the sale will be used to boost growth in the core infrastructure platforms as the move is said to be a result of the Indian conglomerate’s decision to focus on its core- infrastructure business.
That being said, Wilmar International, in a statement, mentioned that the deal will be funded from internal sources and bank borrowings and that post Adani Group’s exit, it will explore opportunities to bring in ‘strategic investors’ for the company as the Indian subcontinent, including Bangladesh, Sri Lanka, and Pakistan, offers ‘tremendous growth potential’ for the agri-food businesses.
As a result of this JV call off, Adani Wilmar which is amongst India’s top edible oils and food companies and has about 24 factories in 15 Indian cities, will undergo a name change post the deal.
