Into Africa

16 March 2017 By Una Galani Follow @ugalani

Anil Agarwal’s personal 2 bln pound raid on Anglo American reveals a wish to build a global mining giant. There is little overlap with his London-listed Vedanta. But Agarwal has a keen interest in Southern Africa – and a 12 pct stake would give him prime position in any break-up.

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Indian billionaire Anil Agarwal said on March 15 that he would buy a shareholding worth up to 2 billion pounds ($2.5 billion) in miner Anglo American.

Agarwal intends to make the investment through his private family holding company Volcan Investments. Volcan will issue a mandatory exchangeable bond, led by JPMorgan, secured by Anglo shares. It will also buy Anglo shares in the open market.

Anglo has a market value of almost 17 billion pounds. A 2 billion pound investment would equate to a near 12 percent stake based on the closing price on March 15. Volcan said it does not intend to make an offer to acquire Anglo.

Agarwal owns almost 70 percent of London-listed Vedanta Resources, which has a market value of 2.3 billion pounds. The company is not participating in the Anglo investment.

Agarwal has pledged a 21.7 percent stake in Vedanta to JPMorgan, and granted the investment bank security over Vedanta corporate bonds worth almost $123 million.

At the World Economic Forum in Davos in January, Agarwal confirmed that he had previously approached Anglo for merger talks with Vedanta subsidiary Hindustan Zinc.

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