India Business Law Journal exhibits the maximum vital offers and disputes of 2018 and the law corporations behind them. Gautam Kagalwala reports
Bast 12 months mingled pleasure with pain for debt-strapped India, and some of the nation’s maximum exceptional deals in our annual Deals of the Year awards carry a tinge of bitter and candy in their element. Identifying the pinnacle 50 deals of the year became no smooth feat, with many worth contenders throughout regions of capital markets, M&A, intellectual property, and disputes.
The economy has been reeling under a mortgage crisis, however, witnessed a ray of wish in 2018 with the Insolvency and Bankruptcy Code (IBC) imparting relief to distressed lenders. Although enacted in 2016, IBC got here into its personal in 2018 with some landmark decisions paving the way for undoing the debt pile-up.
One of the enormous successes of the IBC turned into the sale of Bhushan Steel to Tata Steel. Telecom operator Aircel filing for financial ruin due to a US$7 billion debt become a chief improvement additionally. The code got here like a shot inside the arm for the thriving M&A zone, as monetary and trade investors from India and overseas coated up to shop for stricken assets. Owing to these ongoing developments, India Business Law Journal has delivered a new insolvency class into this yr’s Deals of the Year document.
In different highlights, the merger of passive telecom infrastructure company Indus Towers with Bharti Infratel, creating the most critical tower agency out of doors of China, turned into noteworthy. However, of most note was the acquisition of Indian e-commerce platform Flipkart through American retail massive Walmart, a transaction taken into consideration to be the largest e-trade deal thus far.
The ghosts of the past stuck up with Malvinder Mohan Singh and Shivinder Mohan Singh, who had bought Ranbaxy a 34.Eight% stake to Daiichi Sankyo in 2008. Delhi High Court allowed the enforcement of a ₹35 billion (US$510 million) arbitral award towards the brothers over the sale, while the Supreme Court refused to intervene.
Meanwhile, the government gained its first bilateral funding treaty arbitration after a London arbitration court docket brushed off the declare of Louis Dreyfus Armateurs over a cargo managing undertaking the logistics corporation had withdrawn from.
India Business Law Journal decided on 50 landmark deals and disputes that have been completed between November 2017 and November 2018 following in-depth studies and session. These offers and instances have been selected subjectively based totally on transactional statistics, submissions acquired from Indian and worldwide regulation firms, and interviews with India-focused legal and corporate experts.
In identifying the attractive deals and cases, our editorial group evaluated the importance of all shortlisted contenders from a felony and regulatory standpoint. Arrangements have been selected now not most effective for his or her size, but for the novelty and complexity of the transaction or case, and for any precedents that could have been installed. The equal criteria had been carried out in choosing the superstar offers.
The Bharat 22 ETF new fund provides became hailed as the most important new fund offer inside the records of India’s mutual fund industry. The government released the Bharat 22 ETF in November 2017, which comprised shares of twenty-two businesses such as public quarter undertakings, federal region banks, ITC, Axis Bank and L&T. The fund had received bids to the amount of ₹320 billion (US$four.4 billion). However, the government retained the most effective ₹145 billion.
“The authorities finally raised ₹84 billion thru a similar fund offer of the Bharat 22 ETF. The deal turned into instrumental for the authorities in accomplishing its disinvestment target,” stated Rajesh Gupta, the dealing with a partner at SNG & Partners. ICICI Prudential Asset Management and Kotak Mahindra Capital had been advisers to the authorities for the creation and launch of the fund.
SNG & Partners, with associate Amit Aggarwal and senior partner Aditya Vikram Dua, changed into the domestic felony adviser to the Ministry of Finance’s Department of Investment and Public Asset Management, even as Perkins Coie, with partner Bobby Majumder, was the worldwide felony adviser. Cyril Amarchand Mangaldas cautioned each ICICI Prudential and Kotak Mahindra Capital, and partners Shagoofa Rashid Khan and Gokul Rajan worked at the deal.
Infosys sold returned 113 million equity stocks worth US$2 billion in its first buyback scheme considering that it’s founding in 1981. The deal needed to observe the buyback policies of the Securities and Exchange Board of India (SEBI) and get hold of clearances from New York Stock Exchange and Euronext London and Paris, where it’s far indexed. Post-extinguishment, Infosys had 2.18 billion shares, with the promoter organization retaining 12.Nine% of the shares.
“The necessities applicable to Infosys had been higher and extra exhausting than any buyback transaction previously achieved by using an Indian employer,” said a representative of AZB & Partners. “Some of these provisions conflicted with the relevant Indian regulation. The employer needed to searching for exemption comfort from the United States Securities and Exchange Commission (SEC) over certain applicable provisions for a project the buyback. A big undertaking becomes to harmonize the complete process given that there were conflicting requirements underneath legal guidelines of various jurisdictions. It took over six months of near interaction with the SEC, SEBI and AMF (French economic services regulator Autorité des Marchés Financiers) to resolve the complicated regulatory demanding situations in the task the buyback.”
AZB & Partners changed into the Indian adviser to Infosys. The company additionally advised Kotak Mahindra Capital and JPMorgan India, which have been the managers for the buyback.
Wilson Sonsini Goodrich & Rosati counseled Infosys on US law, and Baker McKenzie counseled Infosys with regards to French and UK regulation; Latham & Watkins advised Deutsche Bank Trust Company Americas, the depository that issued Infosys’ American depositary receipts.
Tata Steel, India’s biggest metal maker, finished a simultaneous but unlinked rights problem of one hundred fifty-five million fully paid ordinary shares of face price of ₹10 every, now not exceeding ₹eighty billion, and up to 77 million partly paid ordinary shares of face price of ₹10 each, no longer exceeding ₹48 billion. The imparting was the second-biggest rights issue undertaken in India and the largest established rights trouble in India. The organization planned to apply ₹97 billion for the repayment of debt and ₹29 billion for well-known company functions.
“The problem becomes certainly one of the biggest rights issues undertaken using a non-public sector entity,” said Yash Ashar, associate and head of capital markets at Cyril Amarchand Mangaldas. “Its unique shape of concurrently issuing fully paid and partly paid shares worried distinct assessment of criminal implications of the shape to make certain compliance with diverse legal guidelines and to acquire the commercial targets of the enterprise. We additionally had to work with the corporation in connection with imparting fair disclosure when it comes to their capability enterprise requirements.”
AZB & Partners became the Indian criminal adviser to the lead managers, even as Milbank Tweed Hadley & McCloy was the worldwide prison adviser. Cyril Amarchand Mangaldas changed into the criminal adviser to the issuer.
Axis Bank’s elevating of equity and fairness-connected capital of ₹116 billion from a fixed of marquee investors became certainly one of the most important non-public fairness investments in India’s banking zone.
Notably, Bain Capital invested ₹sixty eight billion in the indexed private quarter bank. Axis Bank deliberate in applying the capital to strengthen its capital adequacy and help the growth of its middle commercial enterprise and subsidiaries. The bank raised ₹90 billion thru the issuance of equity and the last ₹26 billion through issuing warrants to the buyers.
AZB & Partners counseled Bain Capital, and Anil Kasturi became the lead on the problem; Kirkland & Ellis become the overseas criminal adviser for Bain Capital.
“[This was] one of the few non-public equity investments in a personal zone financial institution, and the first instance of issuance of warrants through a personal zone financial institution. The deal involved examination of complicated FDI concerns as well as troubles beneath [Reserve Bank of India] RBI regulations regarding the acquisition of possession in non-public zone banks,” said an AZB representative of their role. Shardul Amarchand Mangaldas & Co suggested Axis Bank.
HDFC raised approximately US$1.6 billion via a preferential allotment of sixty-five million fairness stocks to a set of investors which includes KKR, GIC, Ontario Municipal Employees Retirement System (OMERS) and PremjiInvest. GIC received 30 million stocks, while OMERS received 10 million scripts.
“The complete capital infusion was finished within every week. The matter concerned several rounds of negotiations with the investors and advising the clients on several troubles concerning remaining of the transaction,” said Subashini Radhakrishnan, a partner at Wadia Ghandy & Co.
Wadia Ghandy & Co counseled HDFC; AZB & Partners advised KKR; Nishith Desai & Associates cautioned GIC.
Vedanta chairman Anil Agarwal’s own family consider Volcan Investments supplied US$1.1 billion to delist Vedanta Resources from the London Stock Exchange in October 2018. Volcan already owned almost sixty-seven % of Vedanta Resources earlier than the statement became made to acquire the relaxation of the stock. “The financing involved complicated troubles around the United Kingdom takeover code necessities as well as complex structuring troubles with admire to the security bundle, which reduce across more than one jurisdictions which include England, Mauritius, India, Cyprus, and the Bahamas,” stated a consultant of Allen & Overy.
Allen & Overy counseled Credit Suisse and Standard Chartered Bank as the arrangers and lenders. Ashurst recommended Volcan with associate Tom Mercer because of the lead at the deal. Latham & Watkins recommended the impartial directors of Vedanta, J Sagar Associates recommended the creditors in India, Uteem Chambers suggested the lenders in Mauritius and Harneys cautioned the creditors in Cyprus.
The provide for sale (OFS) of shares by using Coal India Limited (CIL) became the largest divestment transaction through the authorities in 2018. The authorities sold a three.1% Stake inside the organization if you want to meet its ₹800 billion divestment target. Retail and institutional buyers sold over a hundred and eighty million shares in CIL. The authorities held a seventy-eight — three % stake in CIL previous to the OFS. The government had sold a 10% stake within the enterprise in 2015 through a similar course.
Herbert Smith Freehills acted as worldwide prison adviser, and Khaitan & Co acted as Indian legal adviser to CIL. Squire Patton Boggs (SPB) recommended the agents Axis Capital, Kotak Mahindra Capital, ICICI Securities, SBI Capital Markets and JM Financial and Shardul Amarchand Mangaldas & Co acted as Indian criminal adviser to the agents.
SPB accomplice Biswajit Chatterjee became the lead for the firm and was assisted through Kaustubh George, Anandee Banerji, and Nabil Shadab.
OPC Asset Solutions have become the primary enterprise to raise cash by securitizing destiny lease receivables from Reliance Retail in a ₹50 billion (US$701 million) transaction. OPC Asset Solutions leased mobile handsets to Reliance Retail on a running hire model and pass-via certificate, subsidized by way of condominium income due from Reliance Retail, have been created in a unique accept as true with called Rainbow Devices Trust.
Wadia Ghandy & Co was the criminal adviser with regards to the securitization of the future lease receivables. The company was represented by using partners Ashish Ahuja and Nihas Basheer. Trilegal recommended Aditya Birla Mutual Fund and became led with the aid of associate Ameya Khandge.
Kolkata-based totally Bandhan Bank is the first banking employer-based totally in the jap vicinity of India to make a public presenting on the inventory markets. The US$672 million supplying became the most significant IPO through an Indian financial institution so far and became oversubscribed 14.Sixty-three times.
Bandhan, which commenced out as a microfinance employer, has become a bank in 2014, making it one of the most up-to-date lenders within the united states of America. After a bumper stock market debut, it has become the 8th-most precious financial institution on the bourses, bypassing larger rivals.
The transaction changed into complicated as it became one of the few instances wherein there had been not unusual personal fairness traders, both on the issuer stage and the promoter level.
Khaitan & Co and Clifford Chance acted as Indian and international criminal recommend to the e-book jogging lead managers, respectively. AZB & Partners acted as Indian prison adviser to the promoting shareholders. Cyril Amarchand Mangaldas acted as the prison adviser to Bandhan Bank.
Hindustan Aeronautics (HAL), India’s most prominent defense public sector employer, raised US$649 million from an initial public supplying on India’s stock markets. The Indian authorities-owned enterprise is engaged in the design, development, manufacture, restore, overhaul, improve and servicing of an extensive range of products such as a plane, helicopters, aero-engines, avionics, accessories, and aerospace structures.
This was the first IPO inside the promising Indian defense zone. The deal changed into uncommon within the feel that numerous aspects of Hindustan Aeronautics’ commercial enterprise were confidential given their sensitive nature, and required “coordination with and remedy from the Ministry of Defence, Government of India, and the Securities and Exchange Board of India.” The deal took up to seven years to carry to the marketplace and heralded the hole up of the India defense area.
Cyril Amarchand Mangaldas changed into the Indian legal adviser to the underwriters. Baker McKenzie advised Hindustan Aeronautics and the Government of India on subjects relating to US securities regulation in connection with the preliminary public supplying of fairness shares of Hindustan Aeronautics’ fairness stocks.
Debt-ridden Jaiprakash Associates exchanged its US$a hundred and fifty million overseas foreign money convertible bonds (FCCB) due in 2017 with the ones maturing in 2020-21. The bonds had been issued in September 2012 with a chit rate of 5.7%.
The bondholders agreed to trade their contemporary bonds for FCCBs, worth US$38 million for a chit charge of 5.7% and maturing in 2021, and amortizing bonds worth US$ eighty-one million with a four.7% coupon fee that develops in 2020.
According to the legal advisers, the restructuring of the present bonds become the result of full-size negotiations with an advert hoc committee of lead bondholders. It is one of the beautiful times wherein substitution of the present convertible bonds with a series of convertible bonds and a series of amortizing bonds occurred thru a vote of the bondholders according to with a consent solicitation workout. Also, those are the first amortizing bonds listed at the Singapore Exchange Securities Trading that have been no longer issued under any debt issuance programme.