Key ECM and DCM deals

Author: | Published: 1 Aug 2012
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Debt and Equity-Linked

Advanti India CB offering

LAW FIRMS

Allen & Gledhill
Listing agent; Singapore counsel to lead manager

J Sagar Associates
Issuer

Linklaters
Credit Suisse (Singapore) as lead manager

Talwar Thakore & Associates
Credit Suisse (Singapore)

Why: This offering of US$50 million floating rate guaranteed convertible bonds by Advanta India was guaranteed by parent company United Phosphorus, which is the largest manufacturer of agrochemicals in India. This was the company's first international securities offering, the first guaranteed offering of convertible bonds from India, and also one of very few that have had a floating interest rate and financial covenants.

Apollo Hospitals Enterprise QIP

LAW FIRMS

Amarchand Mangaldas
Joint bookrunning lead managers

Latham & Watkins
Joint bookrunning lead managers

Luthra & Luthra
Issuer

Why: This private placement offering to qualified institutional buyers involved resolving certain complex regulatory issues pertaining to foreign exchange and insurance laws as the issuer, Apollo Hospitals Enterprises, has a joint venture in the insurance business. As the US$74.22 million offering was on a private placement basis by a listed issuer, the transaction also entailed resolving certain issues in relation to marketing and was concluded in a short timeframe.

Ballarpur hybrid offering

LAW FIRMS

Allen & Overy
Issuer

Clifford Chance
Underwriters HSBC and RBS

DLA Piper
Issuer

Luthra & Luthra
Underwriters HSBC and RBS

Shearn Delamore & Co
Issuer

Why: This was the first US dollar-denominated perpetual securities offering from the Indian market; the issuing vehicle being part of the larger Ballarpur group, which is India's largest producer of writing and printing paper and part of the Avantha Group. The terms of the securities provided the issuer with both equity credit from Standard & Poor's and Fitch and equity accounting classification. The structuring of the terms also required counsel to cater for future IPOs at various levels within the Ballarpur group.

Canara Bank QIP

LAW FIRMS

Amarchand Mangaldas
Issuer

Jones Day
Bookrunners

Luthra & Luthra
Bookrunners

Why: Canara Bank raised US$440.29 million in the largest qualified institutional placement by a public sector bank in India till date. As the issuer was not incorporated under the Companies Act, the deal involved the analysis of various laws governing the issue of securities under the QIP route to ascertain their applicability to entities other than companies. And as this was a QIP by a public sector bank, the Government had prescribed restrictions on selling the shares to certain categories of institutional investors.

Essar Energy CB offering

LAW FIRMS

Carey Olsen
Issuer and the Guarantor

Freshfields Bruckhaus Deringer
Issuer and the Guarantor

Linklaters
Bookrunners

Why: In connection with Essar Energy's issue of convertible bonds, one of the bookrunners entered into an equity swap with the principal shareholder of the guarantor to create synthetic stock borrow (to be made available to investors to facilitate hedging arrangements). This was while protecting the principal shareholder's stake in the guarantor from being diluted upon conversion of the bonds. This was the first time that such a structure had been used in the context of a UK convertible bond. Although the bonds were offered to non-US investors pursuant to Reg S, the documentation was tailored to accommodate an offer to a limited number of onshore US investors.

ICICI bond offering

LAW FIRMS

Amarchand Mangaldas
Indian counsel

Davis Polk & Wardwell
Issuer

Latham & Watkins
Lead managers

Slaughter and May
Issuer

Why: ICICI Bank's US$1 billion Rule 144A and Reg S bond offering was part of its existing US$5 billion medium term notes programme. ICICI Bank is the first Indian lender to tap professional investors in the US. The offering was remarkably oversubscribed with an order book of US$2.7 billion. It attracted more than 220 investors, including considerable demand from US investors which made up the majority. It is the tightest pricing ICICI Bank has ever achieved.

Tata Power hybrid offering

LAW FIRMS

Allen & Overy
Deutsche Bank, Goldman Sachs and UBS as joint lead managers

Amarchand Mangaldas
Joint lead managers

AZB & Partners
Guarantor

C&A Law
Mauritian counsel

Why: India's largest integrated private power company Tata Power closed the first ever US dollar denominated corporate hybrid bond to be issued by an Indian issuer. Deutsche Bank, Goldman Sachs and UBS were joint lead managers on the Reg S issuance of US$450 million 8.5% fixed to floating rate subordinated notes by Bhira Investments, a wholly-owned subsidiary of Tata Power. Counsel advised on the structuring of the guarantee by the Guarantor (Tata Power), which was subordinated to senior unsecured and subordinated obligations of the Guarantor.

Vedanta Resources bond offering

LAW FIRMS

Amarchand Mangaldas
India counsel to issuer and underwriters

AZB & Partners
India counsel to others

Corpus Legal Practitioners
Issuer

Henry Davis York
Issuer

Latham & Watkins
Issuer

Shearman & Sterling
Underwriters

Why: After a three-year absence from the international bond market, diversified metals and mining company Vedanta Resources returned with its US$1.65 billion bond offering. This was the largest bond offer by an Indian corporate and the largest high-yield offer by an Asian corporate. It involved an innovative structuring to address the fact that it was the acquisition financing for a controlling stake in Cairn India. Its success was remarkable given that the issuance was taken to market when there was huge uncertainty in the global financial markets, while it also followed the unsuccessful IPO of Vedanta's Zambian unit KCM.


Equity

Central Bank of India rights issue

LAW FIRMS

Jones Day
Underwriters

Khaitan & Co
India counsel to issuer and underwriters

Why: At the start of 2011, Indian financial institutions such as Canara Bank, Mahindra & Mahindra Financial Services and Manappuram General Finance & Leasing began raising capital through the equity markets. Central Bank was no different, and its US$550 million rights offering pursuant to Reg S was one of the largest equity offerings in India in the latter part of the year. Underwritten by ICICI Securities, Citi, Enam Securities, IDBI Capital, RBS and SBI Capital, the offering took place during extremely volatile capital markets.

EIH rights issue

LAW FIRMS

Amarchand Mangaldas
Citigroup Global Markets India

Khaitan & Co
Issuer

Linklaters
Citigroup Global Markets India

Why: EIH Limited is the flagship company of well-known hospitality group the Oberoi Group. This Rs 8 billion (US$145 million) rights issue was its first significant capital raising in 17 years. With Citigroup acting as sole lead manager, this was one of the first Indian rights issues that was structured to international standards. Among other things, counsel had to determine the disclosure standards and ensure that the issue complied with US securities laws.

Future Venture India IPO

LAW FIRMS

Amarchand Mangaldas
India counsel to issuer and underwriters

Dorsey & Whitney LLP
Drafted international wrap

Why: Future Venture is a listed company that invests in, and operationally manages, innovative and emerging businesses in consumption-led sectors in India. Initially filed in February 2008, and then re-filed in August 2010, the company's Rs 7.5 billion (US$142 million) issue was only approved by Sebi following a set of undertakings by the company. In addition, the promoters had to place an additional premium on the shares (to match the issue price) in an escrow account prior to opening of the issue. Among other things, counsel advised on the escrow mechanism and the drafting of the relevant agreement.

L&T Finance Holdings IPO

LAW FIRMS

AZB & Partners
Issuer

Clifford Chance
Underwriters

S&R Associates
Underwriters

Why: In August 2011, L&T Finance Holdings completed its Rs 12.45 billion (US$237 million) IPO and listed its equity shares on the Indian stock exchange. With a Rule 144A and Reg S component, the issue was the largest IPO in the private sector in India in 2011 and was completed under difficult market conditions. JM Financial, Citi, HSBC, Barclays Capital, Credit Suisse and Equirus Capital acted as underwriters on the issue, which included an employee reservation and L&T shareholders' reservation.

MakeMyTrip follow-on offering

LAW FIRMS

Amarchand Mangaldas
Underwriters

Conyers Dill & Pearman
Issuer

Latham & Watkins
Issuer

S&R Associates
Issuer

Shearman & Sterling
Underwriters

Why: Following its IPO last year, MakeMyTrip returned to the US market with its US$125.8 million public follow-on offering of 5.5 million shares on the Nasdaq Global Market. This was the only SEC-registered public offering in the US by an India-focused company in 2011, and is just one of three follow-on offerings in the US by an Indian company in the past three years. The transaction was completed in a tight timeframe during a period of considerable volatility in the market.

Power Finance Corporation further public offering

LAW FIRMS

Amarchand Mangaldas
Underwriters

AZB & Partners
Issuer

DLA Piper
Issuer

O'Melveny & Myers
Underwriters

Why: The Rule 144A and Reg S further public offering of US$1 billion of equity shares in Power Finance Corp was the largest equity deal of the year in India. It was also one of the most complicated of the Government's major disinvestments from the power sector, due to the issuer being a non-banking financial company and operating in a highly regulated sector – leading to highly complex disclosure issues. As the company is one of the most prolific issuers in the Rupee-denominated debt market, counsel had to carefully structure the international offering process and documentation around the domestic offering process and documentation. The compressed timetable also led to multiple execution challenges.

Tata Steel follow-on offering

LAW FIRMS

Amarchand Mangaldas
Issuer

AZB & Partners
Underwriters

Cleary Gottlieb
Issuer

Milbank
Underwriters

Why: One of the world's largest steel producers, Tata Steel raised approximately US$774 million from its follow-on offering, which included a public offering in India and a Rule 144A/ Reg S international placement. This was the largest private sector follow-on public offering. The company's UK and Europe operations posed significant challenges to counsel to meet 'due diligence' requirements, disclosures in the prospectus as well as representations and warranties provided by the company to the underwriters (the underwritten arrangements in this transaction were extremely rare for public offers in India).

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