Emerald Sage Investment Limited, a subsidiary of Warburg Pincus is purchasing compulsory convertible preference shares (CCPS) of Apollo Tyres worth INR 10.8 Billion. The investment witnesses the primary capital infusion into the company and will be taken forward after shareholders and regulatory approvals.
The CCPS of the company currently holds a dividend at a rate of 6.34 per cent per annum. However, at a price of INR 171 per share, these can be transformed into INR 0.063 Billion equity shares within 18 months. Apollo tyres is engaged in the production of automotive bias and radial tyres. Hence, this high investment from Warburg Pincus in the company is anticipated to even positively affect its operations across the product value chain, thereby benefiting all the stakeholders involved such as manufacturers of carbon black, SBR etc.
Chairman and Board of Director of Apollo tyres supported the agreement by saying that the company is inclined to benefit from this deal as the financial investment will further strengthen the board of governance and business perspectives of Apollo tyres. Moreover, Managing Director and Head of Warburg Pincus India expressed his excitement over the agreement by adding that they believe that Apollo tyres is a well-established industry propelling towards making a renowned position in the business in the coming years.