Tube Investments gains post acquiring controlling interest in CG Power
The share of Tube Investments of India gained as much as 6 per cent after the company reported that it has acquired a controlling interest in CG Power and Industrial solutions.
CG Power was in the news after a case of fraud was registered against the company. Besides, the private equity company, KKR is a minority investor in it.
In an exchange filing, the company stated that CG Power will issue shares worth Rs 550 crore and warrants worth Rs 150 crore to Tube Investments, via preferential allotment basis.
The press release also mentioned that the shares will be issued at a price of Rs 8.56 per share, which is 20 per cent down from its Friday closing. These warrants issued by the company will be convertible into an equivalent number of equity shares at the option to Tube investments within eighteen months from the allotment.
Both the companies, which are in the same sector that is engineering, are expected to be beneficial to all. Tube Investment believes that its operations as well as financial efficiency could help in the resolution of issues going on in CG Power.
Reacting to the news, the shares of CG Power gained 5 per cent and Tube Investments gained 6.25 per cent on BSE.