Adani Enterprises (AEL), one of India's largest conglomerates, is set to sell its almost 44% shareholding in Adani Wilmar Ltd. (AWL) to Wilmar International in a $2 billion transaction. This move is aimed at fulfilling public shareholding standards and using the profits to expand its main infrastructure platforms, such as energy, utilities, transportation, and logistics. The sale will also see AEL's nominee directors resigning from the AWL board and a change in the company's name. This comes just after AEL and its chairman Gautam Adani were indicted in the United States on bribery and fraud charges.
Adani Enterprises Divests Adani Wilmar Stake in $2 Billion Deal
In a significant move, Adani Enterprises (AEL), a leading Indian conglomerate, has announced the sale of its 44% stake in Adani Wilmar Ltd. (AWL) to Wilmar International for $2 billion. This transaction is intended to fulfill public shareholding standards and divert funds towards AEL's core infrastructure businesses.
Background:
Adani Wilmar is a joint venture between AEL and Wilmar International, established in 1999. It is one of the leading branded food companies in India, with a presence in edible oil, wheat flour, rice, pulses, and sugar.
Rationale for Sale:
AEL has cited the need to meet public shareholding requirements and focus on expanding its core infrastructure platforms, which include energy, utilities, transportation, and logistics. The proceeds from the sale will be utilized for these growth initiatives.
Impact on AEL and AWL:
AEL's nominee directors will resign from the AWL board following the transaction. The company's name is also expected to change. AWL will continue to operate as an independent entity, with Wilmar International holding a controlling stake.
Indictments and Allegations:
The announcement of the sale comes shortly after AEL and its chairman, Gautam Adani, faced bribery and fraud charges in the United States. These allegations have cast a shadow over the conglomerate's reputation and operations.
Top 5 FAQs:
1. Why is AEL divesting its stake in Adani Wilmar? To meet public shareholding requirements and fund its core infrastructure businesses.
2. Who is acquiring the stake? Wilmar International, a global agribusiness conglomerate.
3. How much is the sale price? $2 billion.
4. Will AWL cease to exist? No, it will continue to operate as an independent entity.
5. What are the implications of the bribery and fraud allegations against AEL and Gautam Adani? The allegations have cast a shadow over the conglomerate's reputation and could potentially impact its operations and partnerships.
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