Article Posted on : - Mar 09, 2015

AHMEDABAD (PTI): Within days of acquiring controlling stake in Pipavav Defence and Offshore Engineering, Reliance Group chief Anil Ambani on Sunday said he will make it the country's biggest defence manufacturer.

Addressing about 4,000 Pipavav Defence and Offshore Engineering workers during his maiden visit to the facility in Gujarat, he said he will "leave no stones unturned to make it India's largest defence manufacturing company".

Ambani along with top officials of the group also met Nikhil Gandhi of Pipavav Group at Pipavav, about 300 km from Ahmedabad.

The development comes barely days after Reliance Infrastructure, in the biggest deal in the defence sector, announced acquisition of controlling stake in Pipavav Defence and Offshore Engineering for up to Rs 2,082.3 crore.

Reliance Infra has said that it will buy 18 per cent stake from promoter group led by Nikhil Gandhi at Rs 63 per share, aggregating to Rs 819 crore.

The company will make an open offer for an additional 26 per cent shares at Rs 66 apiece, totalling Rs 1,263.3 crore.

In case the open offer fails, Reliance Infra will acquire additional shares from promoters to ensure its shareholding is not less than 25.10 per cent.

Promoters at present hold 44.50 per cent stake in Pipavav Defence, which is reportedly looking at debt recast.

The Anil Ambani Group, which has announced foray into defence manufacturing, will buy 13 crore equity shares from promoters together with sole management control.

The acquisition would be done by Reliance Infrastructure, together with its wholly owned subsidiary Reliance Defence Systems Pvt Ltd.

Pursuant to the buyout resulting in a change in management and control of Pipavav, Reliance Defence Systems Ltd, a subsidiary of Reliance Infrastructure, made an open offer to acquire 26 per cent from public shareholders of the company at Rs 66 per share.

Post the transaction, the existing promoters of Pipavav Defence will continue to retain a minority stake in the company, together with two non-executive Board seats.

The transaction is subject to certain conditions precedent and various statutory approvals.

Commenting on the transaction, Ambani has said, "This is a unique opportunity for Reliance Group to participate in Prime Minister Narendra Modi's 'Make in India' programme for the high growth defence sector."