Adani Group plans $2 billion exit from joint venture with Singapore’s Wilmar

SINGAPORE - Indian conglomerate Adani Group plans to exit its joint venture with Singapore-listed agribusiness group Wilmar International, both companies said on Dec 30.

The joint venture, called Adani Wilmar, was incorporated in 1999 and has 24 factories across 15 cities in India. It is listed on two stock exchanges in India.

It offers essential kitchen commodities for Indian consumers, including edible oil, wheat flour, rice and sugar. 

Adani will exit its 44 per cent stake in Adani Wilmar. It will sell a 13 per cent stake to comply with India’s minimum public shareholding requirements, with the remainder going to Wilmar.

In a filing on the Singapore Exchange (SGX), Wilmar said it will acquire Adani’s remaining 31 per cent stake at a price of not more than 305 rupees per share, through its wholly owned subsidiary Lence.

Assuming that the shares are acquired at this maximum price, it will be worth US$1.48 billion (S$2 billion).

The acquisition will be funded from internal sources as well as bank borrowings, said Wilmar. Adani Wilmar will be a Wilmar subsidiary after the acquisition.

Wilmar said that the rural market in India presents significant growth opportunities, and Adani Wilmar is well positioned to capture a substantial market share, by leveraging Wilmar’s global operations and distribution network. 

Adani Wilmar also exports products such as rice, castor oil and oleochemicals to over 30 countries.

“These are important commodities in Wilmar’s global trades. A strong presence in India will allow Wilmar to source better and have better trade flows into Wilmar’s global network,” it said in the SGX filing.

Adani Group is headed by Indian billionaire Gautam Adani, one of the world’s richest people.

The group came under the spotlight when US prosecutors alleged a bribery scheme in criminal and civil charges related to a solar development bid, in an indictment unsealed on Nov 20.

US prosecutors alleged that Mr Adani and seven others, including his nephew, promised to pay bribes to Indian government officials to win solar energy contracts.

The indictment wiped out US$27 billion in market value in the listed companies under the Adani Group umbrella when it was first announced. The group has businesses spanning ports, airports, manufacturing and energy.

Wilmar’s share price closed at $3.09 on Dec 30, up 0.65 per cent or two cents from its previous close of $3.07.