Business
Acquisition of Dalmia Bharat Refractories Limited
Acquisition of Dalmia Bharat Refractories Limited.
About this update from Rhi Magnesita Nv
[{"type":"text","content":"\n \n 21 November 2022\n \n \n RHI Magnesita N.V.\n \n (\"RHI Magnesita\" or \"the Group\")\n \n \n Acquisition of Dalmia Bharat Refractories Limited via Share Swap Agreement\n \n \n \n RHI Magnesita announces the acquisition of the Indian refractory business of Dalmia Bharat Refractories Limited (\"DBRL\") via a Share Swap Agreement, in exchange for 27 million shares in RHI Magnesita India Limited, a 70% owned subsidiary of the Group which is listed on the Bombay Stock Exchange and National Stock Exchange of India.\n \n \n \n Dalmia Bharat Refractories\n \n \n \n DBRL is one of the leading refractory producers in India with approximately 1,200 employees and production capacity of over 300 ktpa, from five refractory plants and raw material sites. DBRL recorded adjusted EBITDA of ₹945 million (€12 million) in the year to 31 March 2022 and had Gross Assets of ₹13,925 million (€170 million) at 31 March 2022.\n \n \n \n Benefits of the Acquisition\n \n \n \n The Acquisition will enable the Group to increase its presence in the high growth Indian refractory market, with forecast steel production growth in India of 12% in 2022 and a 7-8% CAGR until 2030. The production footprint (5 plants) and product offering of DBRL is highly complementary to the Group's existing plant locations (4 plants) and product range with focus in the industrial segment, where RHI Magnesita is currently under-represented. Significant network benefits and margin improvement potential have been identified through the addition of production capacity in important industrial locations in the south and west of India, where the Group currently has no assets.\n \n \n \n Acquisition details\n \n \n \n Under the terms of the Share Swap Agreement, RHI Magnesita India Limited will acquire all outstanding shares in DOCL in exchange for 27 million new shares in RHI Magnesita India Limited. Based on the closing share price of RHI Magnesita India Limited on 18 November 2022 of ₹645.35 per share, the Consideration Shares had a value of approximately ₹17,424 million (€212 million).\n \n \n The Group will consolidate DOCL's earnings and approximately €54 million of net debt held by DOCL through its majority shareholding in RHI Magnesita India Limited, resulting in a marginal increase in gearing at Group level. The Acquisition is expected to be accretive to Gro...