India Business Law Journal celebrates 50 of the most significant deals and disputes of 2012 and reveals the legal architects that guided them to fruition

The global financial crisis threw up many opportunities for Indian companies, but most of the deals in 2012 were driven by a desire to take their business forward rather than amass trophy assets like earlier. Power and roads projects are gaining momentum, impacting project finance big time. Like the Chinese, Indians too are buying up coal mines in Australia and Africa.

It’s also payback time in India. Five years ago when the economy was growing at 8%, companies issued convertible debt instruments to fund their aggressive plans to expand capacity and reach out to newer markets at home and overseas. With redemption pressures, there’s heightened activity in the corporate debt restructuring arena. According to the Reserve Bank of India, some US$7 billion of Indian foreign currency convertible bonds (FCCBs) are maturing by 31 March 2013. Default or restructuring is expected to affect two-thirds of the FCCBs according to credit rating agencies.

Following a lengthy period of research and consultation, India Business Law Journal has identified 50 landmark deals and disputes that were sealed between December 2011 and December 2012. The winning deals and cases, which are divided into seven categories, have been chosen subjectively based on transactional data, submissions received from Indian and international law firms, and interviews with India-focused legal and corporate professionals.

In deciding the winning deals and cases, our editorial team evaluated the significance of all shortlisted contenders from a legal and regulatory standpoint. Deals were chosen not for their size, but for the novelty and complexity of the transaction or case and for any precedents that may have been established.

Capital Markets Deals of the Year

ONGC’s offer for sale

Value

Principal law firms

US$2.5 billion

Amarchand Mangaldas

Ashurst

Luthra & Luthra


Whenever the Indian government wants to raise money to ease its fiscal deficit, it dilutes its stake in some of the family jewels. In the country’s first transaction conducted by way of offer for sale (OFS), the government sold off 5% of Oil & Natural Gas Corporation (ONGC), India’s largest oil and gas producer. One of the biggest equity offerings in India in 2012, the sale was done via an auction on the stock exchange. Investor response was lukewarm so state-run companies filled in and subscribed to the shares on offer. The government was finally able to raise US$2.5 billion.

Ashurst represented Bank of America Merrill Lynch, Citi, HSBC, Nomura, Morgan Stanley and JM Financial in connection with the OFS. “The deal was particularly complicated because the work involved matching a local equity product with the international regime,” an Ashurst spokesperson said.

Amarchand Mangaldas partner Prashant Gupta was the domestic counsel to the brokers. “There were complex legal issues involved since the OFS was open to subscription to the general public, which raised concerns on compliance with certain provisions of the Companies Act in relation to public offerings, as well similar issues related to compliance with restrictions and issues under laws of other jurisdictions,” Gupta told India Business Law Journal.

Luthra & Luthra partner Madhurima Mukherjee represented India’s Department of Disinvestment, while Tim Pitrelli acted as the in-house counsel for Merrill Lynch.

Reliance petrochemical refinery
expansion financing

Value

Principal law firms

US$2.1 billion

Allen & Overy

Milbank Tweed Hadley & McCloy

Vedder Price

Reliance Industries (RIL), which has the largest refinery operation in the world at Jamnagar in the western Indian state of Gujarat, intends to expand its output by constructing the world’s largest petroleum coke gasification unit, significantly enhancing the efficiency of its refinery business.

The expansion is part of RIL’s plans to double profit in the next four to five years, the Press Trust of India reports.

Milbank Tweed Hadley & McCloy partner Glenn Gerstell was the international counsel for RIL in its largest single transaction to date with the Export-Import Bank of the US (Ex-Im Bank). RIL obtained a US$1.06 billion loan from Ex-Im Bank and a US$1.06 billion loan from JP Morgan, guaranteed by Ex-Im Bank, for goods and services for use in the refinery expansion. In addition to direct loan financing, the deal also involved RIL’s first attempt at funding through the capital markets with an Ex-Im Bank-guaranteed bond issuance.

Allen & Overy advised the US Ex-Im Bank. Vedder Price was the counsel to JP Morgan. Partap Singh was Reliance’s in-house counsel.

The deal is expected to be signed on 24 January 2013.

Delisting of Patni Computer Systems

Value

Principal law firms

US$1.22 billion

AZB & Partners

Hogan Lovells

Kirkland & Ellis

Wadia Ghandy & Co

For the first time, an Indian company listed in both India and the US was successfully delisted from the Indian stock exchanges. Patni Computer Systems was bought by iGate, a Nasdaq-listed information technology services company, in one of the biggest acquisitions of 2011. At the time Patni was bigger than iGate in terms of revenue.

In 2012, iGate paid a 3% premium to buy out the shareholders of Patni, more than it paid for a controlling stake in the company. Commenting on the buyout iGate CFO Sujit Sircar said: “The successful delisting will set us up well for a possible downstream merger while also reducing costs of compliance and governance.”

Kirkland & Ellis partner Srinivas Kaushik advised iGate in the delisting of Patni Computer Systems from the Bombay Stock Exchange and the National Stock Exchange of India.

“Working with complicated and often conflicting SEC and Indian rules posed a unique challenge in accomplishing this novel cross-border take private transaction,” Kaushik told India Business Law Journal.

srinivas-kaushik-partner-kirkland-ellis

AZB & Partners’ Essaji Vahanvati and Varoon Chandra acted for Pan-Asia iGate Solutions and iGate Global Solutions.

Hogan Lovells represented Patni Computer Systems on US law, while Wadia Ghandy & Co advised on Indian law.

Network18 and TV18 rights issuances

Value

Principal law firms

US$1 billion

Amarchand Mangaldas

Khaitan & Co

Latham & Watkins

Indian businessmen love to be in the media business and India’s richest man – Mukesh Ambani of Reliance Industries – is no exception. After being the white knight for South India-based Eenadu Television Broadcasting a few years ago, Ambani bailed out Network18.

In a complex transaction, media and entertainment company Network18 Media & Investments and a subsidiary, TV18 Broadcast, launched simultaneous rights offerings. The proceeds of the Network18 rights issue were used to subscribe to the TV18 rights issue, which in turn was used to fund the acquisition of Eenadu’s television broadcasting division, in which Reliance has a stake.

Funding for a significant part of the rights issues was provided by Independent Media Trust (IMT), a Reliance Industries arm. IMT invested in certain Network18 group companies through zero coupon optionally convertible debentures.

Latham & Watkins partner Rajiv Gupta was the counsel to lead managers ICICI Securities and RBS Equities on international legal issues. Amarchand Mangaldas advised the lead managers on domestic legal issues.

Khaitan & Co partner Vibhava Sawant was the issuer’s Indian counsel and Kshipra Jatana was the in-house counsel at Network18 Group.

Bharti Infratel IPO

Value

Principal law firms

US$825 million

Amarchand Mangaldas

Linklaters Singapore

Luthra & Luthra

Milbank Tweed Hadley & McCloy

This was India’s biggest initial public offering since 2010 and the first in the telecommunications tower sector. Launched in December 2012, the IPO was fully subscribed but retail response was muted compared to the hearty demand from institutional buyers. Bharti Infratel’s share price slid post debut.

Proceeds from the IPO are to be used to fund its expansion and future acquisitions. The company wants to install new towers and upgrade and replace existing ones. Four private equity players, including Japanese financial services group Nomura, Singapore’s sovereign wealth fund Temasek and Goldman Sachs’ investment arm, sought to divest their stakes with the IPO. Milbank Tweed Hadley & McCloy’s Naomi Ishikawa and Anthony Root were the international counsel to the 13 underwriters in the transaction

Linklaters Singapore was the issuer’s international counsel and Amarchand Mangaldas was the local counsel. Luthra & Luthra was the underwriters’ local counsel.

Jaguar Land Rover’s high-yield bond offering

Value

Principal law firms

US$798 million

Hogan Lovells

Shearman & Sterling

Sullivan & Cromwell

With the UK’s corporate bond boom in 2012, Tata Motors subsidiary Jaguar Land Rover (JLR) leveraged the opportunity for a new bond issuance to raise US$798 million. The car maker, which underwent a financial restructuring in 2011, said it would use the funds from the fixed rate high-yield bonds due 2020 for corporate purposes, but did not elaborate.

Tata Motors bought the British marquee brands in 2008. This is the second such issue from JLR. In May 2011, JLR issued US$1.6 billion worth of fixed-rate high-yield bonds.

“The volatility in the high-yield market means that clients require maximum optionality to access the market for different currencies, maturities and amounts at the right time,” Apostolos Gkoutzinis, a partner at Shearman and Sterling’s London office told India Business Law Journal.

apostolos-gkoutzinis-partner-shearman-sterling

Shearman & Sterling advised the issuer on English and US law and Hogan Lovells counselled the issuer on English and Wales law.

Sullivan & Cromwell represented the underwriter.

Mahindra & Mahindra Financial Services’
qualified institutional placement

Value

Principal law firms

US$160 million

Amarchand Mangaldas

Jones Day

Khaitan & Co

This transaction was the largest qualified institutional placement (QIP) of 2012. Mahindra & Mahindra Financial Services (MMFSL), the finance arm of auto major Mahindra & Mahindra (M&M), undertook the transaction in tough market conditions.

The company, which mainly lends to M&M customers, received bids for the issue within 24 hours of the launch. “The high level of interest shown by leading institutional investors across the globe in the current uncertain economic environment reflects their confidence in the group’s track record of corporate governance and the company’s consistent record of good performance,” said MMFSL chairman Bharat Doshi.

Jones Day partner Manoj Bhargava advised institutional investors Kotak Mahindra Capital Company, Citigroup Global Markets India, Deutsche Equities India, HSBC Securities and Capital Markets (India) and JM Financial Institutional Securities on the QIP. Amarchand Mangaldas partner Yash Ashar was the domestic counsel to the placement agents. Khaitan & Co partner Nikhilesh Panchal advised MMFSL.

Jaiprakash Associates’ convertible bonds
due 2017

Value

Principal law firms

US$150 million

Allen & Gledhill

Axon Partners

Linklaters

Talwar Thakore & Associates

With the Indian economy growing at 8% in 2007-08, companies were aggressively expanding at home and overseas. Many of the players issued convertible debt instruments to fund their growth plans. It’s payback time and many are facing redemption pressures. Jaiprakash Associates, the flagship company of the Jaypee group, is no exception. In 2012, the company raised US$150 million in foreign currency convertible bonds to partly finance its earlier convertible bonds, and its scrip tumbled.

Linklaters, which has acted for the Jaiprakash group several times, including their bond offerings in 2005, 2006, 2007 and 2010, advised Standard Chartered Bank and Barclays Bank as the joint lead managers in 2012. A separate Linklaters team advised the The Bank of New York Mellon, London Branch, as trustee. Dean Lockhart and Pallavi Gopinath Aney represented the firm.

Talwar Thakore & Associates was the Indian legal adviser to the joint lead managers. Axon Partners represented the issuer and Allen & Gledhill acted for the listing agent.

Wipro’s block trade

Value

Principal law firms

US$140 million

Amarchand Mangaldas

Clifford Chance

S&R Associates

This is the first sale through the auction route by a private company. This was also the first transaction by a private player to comply with the Securities and Exchange Board of India’s minimum public shareholding guidelines. In March, the Azim Premji Trust proposed to auction 35 million shares of the IT major Wipro to raise money for the Azim Premji Foundation’s education activities. The endowment supporting the foundation is held by the trust.

The response to the auction was tepid, and the trust got bids for only 71% of the shares on offer.

Clifford Chance’s Rahul Guptan advised the lead arrangers for the sale – Citigroup, Morgan Stanley, UBS and Credit Suisse. “Structuring the commercial parameters to new Indian regulations was challenging,” Guptan told India Business Law Journal. “We maintained a balance between the requirements of US and Indian regulations and practice.”

Amarchand Mangaldas partner Nivedita Rao represented the seller. S&R Associates’ Sandip Bhagat, Uday Walia and Jabarati Chandra advised the banks. Bhavna Thakur was Citigroup’s in-house counsel.

Multi Commodity Exchange of India’s IPO

Value

Principal law firms

US$133 million

Amarchand Mangaldas

AZB & Partners

J Sagar Associates

Jones Day

At a time when most markets were still reeling from the global financial crisis, the Multi Commodity Exchange of India (MCX), the country’s largest commodity bourse by volume, had the audacity to launch an IPO. Not only was the issue subscribed 54 times, the shares zoomed 26% on debut trade making it one of the most successful IPOs in turbulent times. The response was so hearty that bankers for the issue are believed to have sought extra time from exchanges for uploading investor applications.

The offer for sale was made by Financial Technologies, State Bank Of India (Equity), GLG Financials Fund, Alexandra Mauritius Limited, Corporation Bank, ICICI Lombard General Insurance Company and Bank Of Baroda.

J Sagar Associates’ partner Nosh Modi was the Indian counsel on the MCX transaction. Jones Day partner Manoj Bhargava represented the underwriters as the international counsel. Amarchand Mangaldas was the underwriters’ Indian counsel, while AZB & Partners’ partner Shameek Chaudhuri advised GLG Financials Fund.

UTI Indian Fixed Income Fund

Value

Principal law firms

Not applicable

Dillon Eustace

Shook Lin & Bok

Trilegal

The UTI Indian Fixed Income Fund is the first-of-its-kind Dublin-domiciled undertaking for collective investment in transferable securities (UCITS) fund by an Indian asset manager which is recognized for offering in Singapore. The fund is being launched by UTI International, a subsidiary of UTI Asset Management, India’s oldest and one of its largest fund managers.

“The fund is designed to give foreign investors easy access to India’s fixed income market,” Sriram Chakravarthi, a partner at Shook Lin & Bok, told India Business Law Journal. Chakravarthi led the transaction with partner Teo Yi Jing, who advised on the Singapore law aspects.

Foreign investors have largely stayed away from Indian government and corporate debt even though India’s GDP is the fourth largest in the world. “The Indian government made it difficult for foreign investors to access the Indian fixed-income market with its requirement for a licence to invest in securities in addition to other hurdles,” said Praveen Jagwani, the Singapore-based chief executive of UTI International, which markets the fund.

Trilegal and Dillon Eustace of Ireland advised UTI on Indian and Irish law aspects of the deal.

M&A and Joint Venture Deals of the Year

Nestlé’s acquisition of Pfizer’s infant nutrition business

Value

Principal law firms

US$11.85 billion

Amarchand Mangaldas

AZB & Partners

Clifford Chance

Mayer Brown

One of the big global acquisitions in 2012 was the purchase by Nestlé, the world’s largest food company, of drug maker Pfizer’s infant-nutrition business. Emerging markets account for 85% of the business in the category for Pfizer.

Both the multinational players have a big presence in India, with Nestlé dominating the US$277 million baby foods market.

The multi-jurisdictional deal had to be tackled at many levels – antitrust, competition and M&A. Amarchand Mangaldas led the competition law analysis of the transaction through to the filing of the notification form with the Competition Commission of India (CCI), ultimately securing an unconditional approval for Nestlé. The company was represented before the CCI by the competition team at Amarchand’s Delhi office, led by senior partner Pallavi Shroff, partner Shweta Shroff Chopra, principal associate-designate Harman Singh Sandhu, and associate Sangeetha Mugunthan.

The transaction involved global antitrust filings in various jurisdictions. Mayer Brown was Nestlé’s global antitrust counsel. Pfizer was represented globally by Clifford Chance’s Brussels office, while AZB & Partners acted as the Indian antitrust counsel.

Vedanta Resources takes majority stake in Cairn India

Value

Principal law firms

US$9.6 billion

Allen & Overy

AZB & Partners

Latham & Watkins

Shepherd & Wedderburn

S&R Associates

Talwar Thakore & Associates

The London-listed Indian conglomerate Vedanta Resources is only the second diversified miner worldwide, after BHP Billiton, to foray into oil and gas. Vedanta completed the acquisition of a majority stake of Edinburgh-based Cairn Energy, demonstrating corporate India’s increasing buying power on the global M&A stage.

The deal gives Vedanta access to India’s biggest onshore oilfields in Rajasthan, which produce around 19% of the country’s annual output. “I am fortunate I am part of the quest for India’s energy security,” said Vedanta chairman Anil Agarwal.

The deal was done through a combination of a public offer and subsequent private purchase. “This is the first transaction of its type in the Indian market where a company has implemented a financing structure which taps the bond, debt and equity markets at the same time,” Allen & Overy partner and Vedanta counsel Sanjeev Dhuna told India Business Law Journal.

Latham & Watkins represented Vedanta on the M&A transaction. AZB & Partners, led by founding partner Zia Mody along with partners Shuva Mandal and Essanji Vahanvati, advised Vedanta on Indian law for the M&A transaction.

Cairn’s long-standing adviser Shepherd & Wedderburn advised on Scottish and English law. S&R Associates acted on Indian law. Talwar Thakore & Associates counselled the lenders.

Diageo buys controlling stake in United Spirits

Value

Principal law firms

US$3.8 billion

Amarchand Mangaldas

Herbert Smith Freehills

Platinum Partners

Slaughter and May

After a lot of speculation, one of the biggest inbound investments of 2012 was the purchase by Diageo – the world’s leading alcoholic beverage maker – of a controlling stake (53.4%) in United Spirits (USL), India’s biggest liquor company. Financially beleaguered Vijay Mallya, who was once hailed as India’s king of good times, is the man behind USL. The deal entails acquiring existing shares from the parent company, United Breweries Holdings (UBHL), a preferential allotment of new shares by USL, and a tender offer to the public shareholders of USL.

Diageo gets access to the Indian market, while the funds will help Mallya pay off debts of companies in his group, including the embattled Kingfisher Airlines. “I believe that I have done what is best for my business,” said Mallya after the divestment. Diageo chief executive Paul Walsh said: “We will be well positioned to take the growth opportunities presented by a spirits market where growth is driven by the increasing number of middle class consumers.” The deal is to be concluded in 2013.

Slaughter and May is advising Diageo on English law. Simon Nicholls is leading the team with Robin Ogle and Padraig Cronin. Platinum Partners’ Nihar Mody, Yash Mohanram and Piusha Bose are counselling Diageo on Indian law. Siobhan Moriarty and James Segal were Diageo’s in-house counsel on the deal.

Deals of the Year 2012

The winning capital markets deals

Deal

Value

Principal law firms

ONGC’s offer for sale

US$2.5 billion

Amarchand Mangaldas
Ashurst
Luthra & Luthra

Reliance petrochemical refinery expansion financing

US$2.1 billion

Allen & Overy
Milbank Tweed Hadley & McCloy
Vedder Price

Delisting of Patni Computer Systems

US$1.22 billion

AZB & Partners
Hogan Lovells
Kirkland & Ellis
Wadia Ghandy & Co

Network18 and TV18 rights issuances

US$1 billion

Amarchand Mangaldas
Khaitan & Co
Latham & Watkins

Bharti Infratel IPO

US$825 million

Amarchand Mangaldas
Linklaters Singapore
Luthra & Luthra
Milbank Tweed Hadley & McCloy

Jaguar Land Rover’s high-yield bond offering

US$798 million

Hogan Lovells
Shearman & Sterling
Sullivan & Cromwell

Mahindra & Mahindra Financial Services’ qualified institutional placement

US$160 million

Amarchand Mangaldas
Jones Day
Khaitan & Co

Jaiprakash Associates’ convertible bonds due 2017

US$150 million

Allen & Gledhill
Axon Partners
Linklaters
Talwar Thakore & Associates

Wipro’s block trade

US$140 million

Amarchand Mangaldas
Clifford Chance
S&R Associates

Multi Commodity Exchange of India’s IPO

US$133 million

Amarchand Mangaldas
AZB & Partners
J Sagar Associates
Jones Day

UTI Indian Fixed Income Fund

Not applicable

Dillon Eustace
Shook Lin & Bok
Trilegal

Deals are listed in order of value. The principal law firms that worked on each deal are listed alphabetically.

UBHL turned to Herbert Smith Freehills for English law, with Roddy Martin leading the team. Amarchand Mangaldas’ Mumbai office, led by managing partner Cyril Shroff and Nivedita Rao, advised UBHL on Indian law with competition law partner Nisha Kaur Uberoi and senior taxation adviser Nanda Shah.

Piramal Healthcare doubles stake in Vodafone India

Value

Principal law firms

US$605 million

Linklaters

S&R Associates

In February, the cash rich Ajay Piramal group’s Piramal Healthcare bought another 5.5% stake in Vodafone India for US$605 million. The purchase from ETHL Communications Holdings takes Piramal’s total holding in Vodafone India to 11%. The transaction completed the exit of the Essar group, which held a 33% stake in Vodafone India, a subsidiary of the British telecom company.

Vodafone said the deal offers various exit mechanisms for Piramal, including participation in a potential initial public offering of Vodafone India and a sale of its stake to the Vodafone group. Getting Piramal in made sense because India doesn’t allow foreign companies to hold more than 74% in a local mobile phone operator.

For Piramal Healthcare, investing in Vodafone India was only a means of parking its surplus funds. Three years ago, Piramal Healthcare sold off its formulations business to US pharmaceutical major Abbott Laboratories, raking in US$3.7 billion. Piramal’s first Vodafone deal, in 2011, involved a host of law firms but the second deal was largely handled by in-house lawyers. Linklaters represented Vodafone on English law. S&R Associates advised Vodafone on Indian law. Founding partner Rajat Sethi led the team with Venkatesh Vijayaraghavan, Radhika Iyer, Simran Dhir and Rohit Anand. “The acquisition transaction was largely local and required limited involvement from overseas counsel, at least on the Vodafone side,” Sethi told India Business Law Journal.

rajat-sethi-partner-sr-associates

Enam Securities sells broking and investment banking businesses to Axis Bank

Value

Principal law firms

US$450 million

Amarchand Mangaldas

AZB & Partners

After a 17-month wait, the Reserve Bank of India cleared Axis Bank’s acquisition of Enam Securities’ broking and investment banking businesses after the proposal was revised. The central bank was not comfortable with the terms of the earlier proposal where Axis Bank was offering shares to Enam while the acquisition was done by its subsidiary Axis Securities & Sales.

The transaction, which concluded in October, included the demerger of some of Enam’s businesses into Axis Bank, enabling the bank to offer a full range of services, something it would not have been able to do organically. The promoters of Enam now hold a 3.3% stake in Axis Bank.

“Since the transaction was between two heavily regulated entities, it posed some unique challenges in structuring to achieve the commercial objectives of the parties while also meeting the requirements of the various regulators,” Nivedita Rao, a partner at Amarchand Mangaldas told India Business Law Journal.

Enam Securities was advised by AZB & Partners led by founding partner Zia Mody and partners Shuva Mandal and Essaji Vahanvati. Amarchand Mangaldas’ Mumbai office, led by managing partner Cyril Shroff and Rao represented Axis Bank.

Bharti Airtel’s acquisition of Qualcomm’s broadband wireless access business

Value

Principal law firms

US$165 million

Amarchand Mangaldas

AZB & Partners

Jones Day

India’s largest mobile player, Bharti Airtel, made an initial investment of US$165 million to acquire a 49% stake in US telecom major Qualcomm’s broadband wireless access business in India. “This partnership will combine the strength of Bharti’s national telecom footprint and Qualcomm’s technological leadership in the LTE TDD [long-term evolution time division duplex] space,” said Bharti chairman and managing director Sunil Mittal. The acquisition gives Bharti Airtel access in 18 circles, including the lucrative Mumbai and Delhi markets, with a combination of 4G and 3G offerings. Bharti now has the heft to take on competitor Reliance Industries, which is the only player with 4G broadband spectrum.

Qualcomm, which won spectrum in four circles during the 2010 auction, has expertise in the new technology. “One of our key objectives has been to include a strong partner in the Indian venture with the scale, experience and resources to deploy LTE TDD networks,” said Qualcomm chairman and CEO Paul Jacobs.

The deal was structured and finalized in the midst of the imbroglio relating to the improper allocation of 2G spectrum, and the cancellation of many 2G licences by India’s Supreme Court. “While the allocation of 2G spectrum had little or nothing to do with this deal, the heightened sensitivity and scrutiny that the telecom sector was subject to made this particular deal challenging,” Sushma Jobanputra, a partner at Jones Day in Singapore and the international counsel for Qualcomm, told India Business Law Journal. AZB & Partners’ Ashwin Ramanathan advised on Indian law.

sushma-jobanputra-partner-jones-day

Bharti Airtel was represented by Amarchand Mangaldas partner Inder Mohan Singh.

Jindal’s purchase of CIC Energy

Value

Principal law firms

US$116 million

Collins Newman & Co

Maples and Calder

Norton Rose

Stikeman Elliott

Webber Wentzel

The New Delhi-based Jindal group turned out to be lucky a second time. Jindal (BVI), a subsidiary of Jindal Steel & Power (JSPL), acquired Canadian coal miner CIC Energy in September. Another Jindal group company – JSW – had failed in its attempt to buy CIC earlier.

The deal gives JSPL access to CIC’s estimated 6 billion tonnes of thermal coal assets in Botswana. Key issues in the deal involved an open offer to the shareholders and the negotiation of provisions that would apply if CIC accepted a superior acquisition proposal. These provisions came into play when a Chinese state-owned enterprise evinced interest in CIC after the deal was signed.

JSPL was flanked by a host of lawyers including Webber Wentzel partner Robert Appelbaum, Collins Newman & Co’s Rizwan Desai, Maples and Calder counsel Barry Mitchell, and Stikeman Elliott’s Dee Rajpal.

CIC Energy was advised by its general counsel Gibbs Johnson and Norton Rose, Canada.

L&T Finance’s acquisition of Fidelity India’s mutual fund business

Value

Principal law firms

US$105 million

Amarchand Mangaldas

Krishnamurthy & Co

In one of the largest mutual fund industry deals, a subsidiary of L&T Finance Holdings acquired the mutual fund business of Fidelity in India. L&T Finance is the financing arm of engineering and construction major Larsen & Toubro.

L&T Mutual Fund now has over US$2.4 billion in managed assets. Observers say the deal was followed by many redemptions.

Fidelity managed the 15th largest mutual fund in India with a 1.3% market share. The deal required approvals from various regulatory authorities including the Securities and Exchange Board of India, the Competition Commission of India and the Reserve Bank of India. It also called for a smooth transition process, which needed to be documented in great detail.

“The timelines coupled with the complexity of the business being evaluated and the multiple regulatory authorities involved made it a very challenging experience for us,” Naina Krishna Murthy, managing partner of Krishnamurthy & Co, which acted for L&T Finance, told India Business Law Journal. The team at Krishnamurthy & Co also included partner Praveen Raju and senior associate Sankar Swamy.

Fidelity was advised by Amarchand Mangaldas partner Ashwath Rau and his team.

Vulcabras Azaleia’s India debut

Value

Principal law firms

US$50 million

Alaya Legal

Trilegal

Brazilian shoe company Vulcabras Azaleia entered India by setting up a subsidiary and acquiring a fully operational production facility in a special economic zone to manufacture and export athletic shoe uppers.

The transaction was implemented through a structured joint venture agreement among three parties in which Vulcabras took full ownership of operations at the production facility with a workforce of 800. The deal included a production supply agreement between Vulcabras and Tata International, and a back-to-back supply agreement between Tata and Pearl Global.

“It was challenging to structure the tripartite arrangements with a view to ensure continuity of operations and preserve the workforce without falling foul of Indian regulations or impacting regulatory permissions and licences,” Delano Furtado, a partner at Trilegal, told India Business Law Journal.

Furtado and Trilegal associate Naresh Pareek counselled Vulcabras. The Brazilian company’s in-house counsel was Armando Bruck. Pearl Global turned to New Delhi-based Alaya Legal for legal advice.

Saab’s investment in Pipavav Defence and Offshore Engineering

Value

Principal law firms

US$40 million

Krishnamurthy & Co

Seth Dua & Associates

This is the first strategic investment by a global defence major in an Indian company focusing on defence production. Sweden’s Saab, a global leader in military hardware, invested US$40 million in India’s Pipavav Defence and Offshore Engineering Company. “Investment from Saab will be used to enhance Pipavav’s infrastructure capability for building and maintenance of military hardware for the Indian army and export markets,” Pipavav Defence said in a notice to the stock exchanges.

Saab will own 3.5% of Pipavav Defence with the option to increase its stake to 10%. Foreign investment in Indian defence companies is restricted to 26%. Pipavav Defence chairman Nikhil Gandhi said the deal would help the company export submarines and frigates to other countries and Saab would use Pipavav Defence’s yard as a hub in India.

Pipavav Defence was represented by Krishnamurthy & Co led by Naina Krishna Murthy, Praveen Raju and Sanket Sethia. Seth Dua & Associates acted for Saab led by senior partner Sunil Seth, partner Subodh Sadana, senior associate Sharad Tyagi and associate Mehak Oberoi. Carl Emil Svedin was Saab’s legal counsel, corporate affairs.

Air Works India buys majority stake in Empire Aviation Group

Value

Principal law firms

US$20 million

Al Tamimi

Gates and Partners

Link Legal

Pinsent Masons

Air Works India Engineering, a Mumbai-based independent provider of aviation maintenance, repair and overhaul (MRO) services, acquired a 74% stake in the Dubai-based Empire Aviation Group (EAG). The purchase was made through Air Works UK, a subsidiary of Air Works India.

Deals of the Year 2012

The winning M&A and joint venture deals

Deal

Value

Principal law firms

Nestlé’s acquisition of Pfizer’s infant nutrition business

US$11.85 billion

Amarchand Mangaldas
AZB & Partners
Clifford Chance
Mayer Brown

Vedanta Resources takes majority stake in Cairn India

US$9.6 billion

Allen & Overy
AZB & Partners
Latham & Watkins
Shepherd & Wedderburn

S&R Associates
Talwar Thakore & Associates

Diageo buys controlling stake in United Spirits

US$3.8 billion

Amarchand Mangaldas
Herbert Smith Freehills
Platinum Partners
Slaughter and May

Piramal Healthcare doubles stake in Vodafone India

US$605 million

Linklaters
S&R Associates

Enam Securities sells broking and investment banking businesses to Axis Bank

US$450 million

Amarchand Mangaldas
AZB & Partners

Bharti Airtel’s acquisition of Qualcomm’s broadband wireless access business

US$165 million

Amarchand Mangaldas
AZB & Partners
Jones Day

Jindal’s purchase of CIC Energy

US$116 million

Collins Newman & Co
Maples and Calder
Norton Rose

Stikeman Elliott
Webber Wentzel

L&T Finance’s acquisition of Fidelity India’s mutual fund business

US$105 million

Amarchand Mangaldas
Krishnamurthy & Co

Vulcabras Azaleia’s India debut

US$50 million

Alaya Legal
Trilegal

Saab’s investment in Pipavav Defence and Offshore Engineering

US$40 million

Krishnamurthy & Co
Seth Dua & Associates

Air Works India buys majority stake in Empire Aviation Group

US$20 million

Al Tamimi
Gates and Partners

Link Legal
Pinsent Masons

Deals are listed in order of value. The principal law firms that worked on each deal are listed alphabetically.

This is the first time an Indian company has made a global acquisition in the area of aviation MRO. Air Works said the move would help it increase its footprint in the Middle East and provide aircraft management services to its customers in India. Air Works managing director Vivek N Gour said the investment was funded through a mix of internal accruals and structured debt finance from private equity firm KKR.

EAG, which offers aircraft sales, management, charter, finance and insurance, has begun working with Air Works on various business initiatives in India and worldwide.

Air Works was advised by Link Legal partner Anand Srivastava, with Pinsent Masons as the Dubai counsel. Al Tamimi, Dubai, represented the exiting shareholders of EAG. Gates and Partners, London, acted for the continuing shareholders.

Venture Capital and Private Equity Deals of the Year

Sale of Genpact shares to Bain Capital

Value

Principal law firms

US$1 billion

Amarchand Mangaldas

Cravath Swaine & Moore

Nishith Desai Associates

Paul Weiss Rifkind Wharton & Garrison

Ropes & Gray

NYSE-listed Genpact, a global leader in business process management and technology services and an erstwhile offspring of General Electric in India, acquired a new partner in August. Private equity player Bain Capital picked up a 30% stake from long-time Genpact investors General Atlantic and Oak Hill Capital Partners.

As part of the transaction, consistent with Bain’s long-term investment orientation, Bain agreed not to sell any Genpact shares for two-and-a-half years, subject to limited exceptions. After the stake changed hands Genpact CEO NV Tyagarajan said: “We will remain an independent public company, and we will continue to pursue our strategic objectives.”

Five law firms helped clinch the deal. Cravath Swaine & Moore represented Genpact. Sarkis Jebejian a former partner at Cravath Swaine & Moore who worked on the deal, told India Business Law Journal: “This deal was especially interesting and satisfying because it required addressing a wide range of business, financial and legal issues across a global platform. The negotiations involved multiple parties and jurisdictions, and we were able to help Genpact reach an overall partnership with Bain.” Jebejian, who joined Kirkland & Ellis on 17 December 2012, acted as international counsel for Genpact along with Thomas Dunn, James Vardell, Michael Schler and Lauren Angelilli.

sarkis-jebejian-partner-kirkland-ellis

Amarchand Mangaldas played a dual role. Mumbai-based corporate partners Ashwath Rau and Vandana Pai Bharucha acted for Bain Capital. Delhi-based partner Naval Chopra and associates Rohan Arora and Dinoo Muthappa provided competition law advice and worked on the merger notification filing with the Competition Commission of India. Ropes & Gray lawyers Will Shields, Newcomb Stillwell, Alison Bomberg, Marcia Ellis, Byung Choi and David Saltzman were the international counsel for Bain.

General Atlantic and Oak Hill Capital used the services of Paul Weiss Rifkind Wharton & Garrison as international counsel, and Nishith Desai Associates for Indian law.

Genpact’s in-house counsel was senior vice-president Victor Guaglianone, while Melissa Obegi was Bain’s Asia general counsel.

Carlyle Group’s exit from HDFC

Value

Principal law firms

US$850 million

AZB & Partners

Linklaters

Luthra & Luthra

In one of the biggest exits in India, the US-based Carlyle Group sold 3.7% of its stake in Housing Development Finance Corporation (HDFC), India’s largest mortgage lender. The stake sale to a group of Indian and foreign institutional investors was executed through the Indian stock exchanges and raised US$850 million.

Carlyle had already divested a 5.2% stake in February. The group’s Asian arm – CMP Asia – had bought into HDFC in 2007 for US$650 million in its biggest investment in India. Carlyle’s exit comes after it nearly doubled its investment in the past five years.

Linklaters partner Arun Balasubramanian was the international counsel to CMP Asia with partner Philip Badge from the firm’s Singapore office. “The transaction structure had to take into account restrictions under Indian securities and tax laws as well as an existing pledge of the shares,” Balasubramanian told India Business Law Journal. Linklaters has advised Carlyle on several India-related transactions. Another Carlyle favourite – AZB & Partners – advised CMP Asia on Indian law.

apostolos-gkoutzinis-partner-shearman-sterling

Luthra & Luthra was the Indian counsel to Deutsche Equities India, one of the buyers of Carlyle’s HDFC stake.

Morgan Stanley unit acquires stake in Continuum Wind Energy

Value

Principal law firms

US$210 million

Davis Polk & Wardwell

Desai & Diwanji

Trilegal

In one of the biggest private equity deals in the Indian wind energy sector, Morgan Stanley Infrastructure Partners (MSIP) – through its group company Clean Energy Investing – acquired a majority stake in Continuum Wind Energy, which owns and operates a host of wind power projects in India. Continuum is now developing an additional 175 MW of capacity in the western Indian state of Maharashtra.

Trilegal advised MSIP as Indian counsel, led by partner Saurabh Bhasin. The team included counsel Avirup Nag and senior associates Nishant Beniwal and Ravi Mahto. “Given the size of the investment and the number of projects that were involved, we had to take into account a host of regulatory issues and project risks across various states in India. As this was a portfolio deal (with projects at different stages of development/operation), we had to ensure that adequate safeguards were built into the transaction documents,” Bhasin told India Business Law Journal.

saurabh-bhasin-partner-trilegal

Kirti Kapoor, a partner at the Hong Kong office of Davis Polk & Wardwell, acted as international counsel to MSIP. Desai & Diwanji’s Amit Khansaheb counselled the promoters.

Goldman Sachs’s follow-on investment in ReNew Wind Power

Value

Principal law firms

US$100 million

Amarchand Mangaldas

Nishith Desai Associates

Shearman & Sterling

Wind energy accounts for 70% of the installed renewable energy capacity in India, making it a winning bet for investors. In July, Goldman Sachs made a follow-on investment in ReNew Wind Power, which plans to add 200-300 MW annually till 2015 through acquisitions and greenfield projects.

Ten months earlier, Goldman Sachs invested US$100 million in ReNew as the first step towards acquiring a majority stake in the Mumbai-based power producer. “The follow-on is a testament to ReNew’s operational excellence and represents a significant investment in a rapidly growing sector in India,” Sidharth Bhasin, a partner at Shearman & Sterling, the international counsel for Goldman Sachs, told India Business Law Journal.

Goldman Sachs is so bullish on the sector that it is reported to have ploughed over US$1.5 billion into renewable energy globally, with plans to pump in US$40 billion over the next 10 years. Nishith Desai Associates was Goldman Sachs’ Indian counsel. Amarchand Mangaldas represented ReNew Wind Power.

Equis Asia Fund’s investment in DANS hydro projects

Value

Principal law firms

US$45 million

HSA Advocates

Rajah & Tann

Trilegal

This transaction is one of the first private equity investments from an overseas fund in a hydro project in the northeast of India, as well as the maiden investment in India by Singapore-based Equis. The funding will cover the project development costs of DANS Energy Consulting hydro projects being undertaken by special purpose vehicles.

The multi-jurisdictional transaction is spread across Singapore, Dubai, Hong Kong and India. “The transaction not only includes equity investment but also involves advice on debt restructuring of the project companies, matters relating to restructuring of the existing shareholding of the project companies, advice on the public interest litigation filed against the project and modification of existing arrangements/agreements executed amongst shareholders of project companies,” Aparajit Bhattacharya, a partner at HSA Advocates, advisers to Equis, told India Business Law Journal. His team included partner-designate Harvinder Singh and senior associate Sumedha Dutta.

Rajah & Tann partner Tracy Ang advised Equis on Singapore law matters. DANS Energy Consulting was counselled by a Trilegal team led by partner Yogesh Singh, counsel Avirup Nag, senior associate Ravi Mahto and associate Dushyant Kumar.

Infrastructure and Project Finance Deals of the Year

Creation of a trust to develop the Delhi Mumbai Industrial Corridor

Value

Principal law firms

US$35 billion

Link Legal

PKA Advocates

With infrastructure as the crux of India’s economic growth, one of the most ambitious infrastructure programmes – the 1,483-kilometre Delhi Mumbai Industrial Corridor – will link the nation’s political and financial capitals. The project aims to develop new industrial cities as “smart cities” to expand India’s manufacturing and services base, and to boost the economy of six states in the corridor.

It also involves a dedicated freight corridor between Delhi and Mumbai. The project is expected to shrink the time to move goods between the two destinations from 14 days to 12 hours.

The mega project will be built with financial and technical aid from Japan. Link Legal managing partner Atul Sharma and partner Dinesh Pardasani advised the nodal agency, Delhi Mumbai Industrial Corridor Development Corporation, on setting up a trust for the project. “The structure to implement this project with substantial central government funding is the first of its kind and involves complex issues,” Sharma told India Business Law Journal.

PKA Advocates acted for the Department of Industrial Policy and Promotion.

GAIL’s long-term purchase of LNG from the US

Value

Principal law firms

US$11 billion

Baker Botts

Clifford Chance

This deal marks the first time that a company has entered into a long-term supply and purchase agreement for liquefied natural gas (LNG). GAIL (India), the country’s flagship gas transmission and marketing company, signed a 20-year deal with Sabine Pass Liquefaction, a subsidiary of Cheniere Energy Partners, to import LNG from the US. BC Tripathi, GAIL’s chairman and managing director, said: “The deal with Cheniere will help GAIL to ensure long-term gas supply for the growing demand in the Indian market.”

Deals of the Year 2012

The winning venture capital and private equity deals

Deal

Value

Principal law firms

Sale of Genpact shares to Bain Capital

US$1 billion

Amarchand Mangaldas

Cravath Swaine & Moore
Nishith Desai Associates
Paul Weiss Rifkind Wharton & Garrison
Ropes & Gray

Carlyle Group’s exit from HDFC

US$850 million

AZB & Partners

Linklaters

Luthra & Luthra

Morgan Stanley unit acquires stake in Continuum Wind Energy

US$210 million

Davis Polk & Wardwell
Desai & Diwanji

Trilegal

Goldman Sachs’s follow-on investment in ReNew Wind Power

US$100 million

Amarchand Mangaldas
Nishith Desai Associates
Shearman & Sterling

Equis Asia Fund’s investment in DANS hydro projects

US$45 million

HSA Advocates

Rajah & Tann
Trilegal

Deals are listed in order of value. The principal law firms that worked on each deal are listed alphabetically.

In the past few years power hungry Indian companies, like their Chinese counterparts, have been buying up US and Australian shale gas assets to fuel their power plants and factories back home.

The lack of a free trade agreement between India and the US, and issues around transportation and contract length, added to the complexity of the negotiations and drafting.

Clifford Chance’s Marc Rathbone advised on the deal. Baker Botts represented Cheniere.

GVK’s investment in the Alpha coal project

Value

Principal law firms

US$10 billion

Allens

Amarchand Mangaldas

Ashurst

Clayton Utz

Herbert Smith Freehills

In late 2011, India’s GVK group acquired a 79% stake in the Alpha coal project, which aims to open up Australia’s Galilee Basin for access to new coal resources. “Opening up a new coal basin brings with it increased environmental scrutiny and challenges. As an integrated mine, rail and port development, the project faced a complex regime of environmental approvals and tenure matters,” Ashurst lead adviser Tony Denholder, who represented the GVK group on Australian law, told India Business Law Journal.

tony-denholder-partner-ashurst

In October, GVK said that it was pushing back the project by one year and also reducing its stake to 51% as the company has been struggling to raise funds for the US$10 billion project. “The target was unrealistic given the size and scale,” said Sanjay Reddy, vice-chairman of the GVK group.

The Ashurst team also included David Mason, Mark Disney, Nerida Cooley, Simon Brown, John Briggs, Paul Wilson, Matthias Schemuth, Damian Salsbury, Carol Kahler, Teresa Scott and Liza Carver.

Amarchand Mangaldas advised GVK in connection with three coal mines and certain infrastructure facilities. Allens, which formed an integrated alliance with Linklaters in 2012, and Herbert Smith Freehills advised on discrete aspects of the project. Clayton Utz represented the Queensland government.

1,320-MW thermal power project in Uttar Pradesh

Value

Principal law firms

US$1.4 billion

Link Legal

In a new era of self-sufficiency in the power sector, the Meja Urja Nigam was set up in the northern state of Uttar Pradesh, India’s largest, as an equal partnership joint venture between the National Thermal Power Corporation and Uttar Pradesh Rajya Vidyut Utpadan Nigam to produce thermal power at a 1,320-MW coal-based plant at Meja Tehsil, in the district of Allahabad. In February, a US$1.4 billion loan agreement was signed with a 16-member consortium led by State Bank of India and syndicated by SBI Capital Markets. According to India’s Central Electricity Authority, the project will be completed in 2016.

Link Legal partner Ajay Sawhney advised the consortium including J&K Bank and L&T Infrastructure Finance Company.

GMR’s financing for Kishangarh-Udaipur-Ahmedabad highway

Value

Principal law firms

US$998 million

Link Legal

This mega highway project is the biggest awarded so far by the National Highways Authority of India to any private developer. The project, which entails widening the four-lane highway to six lanes running through western India, will be carried out by a subsidiary of Hyderabad-based GMR Infrastructure.

Link Legal advised the consortium of banks on all aspects of extending a loan facility aggregating to US$998 million for part financing the cost of the 555-kilometre highway. Amba Prasad, senior vice-president, legal, of the GMR group was the in-house counsel for the deal.

Veolia Water’s PPP projects

Value

Principal law firms

US$600 million

Seth Dua & Associates

Veolia Water India, the Indian arm of Veolia Water of France, the world’s largest water services company, has bagged many projects in India in the past couple of years. These are largely public-private partnerships (PPPs) with state governments and local municipal corporations, from Karnataka in the south to New Delhi in the north.

“These deals are unique due to the fact that water PPP is at a nascent stage in India,” says Sunil Seth, senior partner at Seth Dua & Associates, which advised Veolia. SVK Babu, director of projects at Veolia India, told India Business Law Journal that the challenge lay in structuring the deals: “Unlike the roads and power sectors which are more specific, there is no proper regulatory environment for water in place, so the contracts are self-regulated. Structuring of the deal to fit into the local, legal and economic needs of the place was tough.”

sunil-seth-senior-partner-seth-dua-associates

Deals of the Year 2012

The winning infrastructure and project finance deals

Deal

Value

Principal law firms

Creation of a trust to develop the Delhi Mumbai Industrial Corridor

US$35 billion

Link Legal
PKA Advocates

GAIL’s long-term purchase of LNG from the US

US$11 billion

Baker Botts

Clifford Chance

GVK’s investment in the Alpha coal project

US$10 billion

Allens

Amarchand Mangaldas

Ashurst

Clayton Utz
Herbert Smith Freehills

1,320-MW thermal power project in Uttar Pradesh

US$1.4 billion

Link Legal

GMR’s financing for Kishangarh-Udaipur-Ahmedabad highway

US$998 million

Link Legal

Veolia Water’s PPP projects

US$600 million

Seth Dua & Associates

Tourism infrastructure in the Buddhist circuit

Not applicable

Kachwaha & Partners

Deals are listed in order of value. The principal law firms that worked on each deal are listed alphabetically.

Seth Dua’s Vasanth Rajasekaran was part of the team.

Tourism infrastructure in the Buddhist circuit

Value

Principal law firms

Not applicable

Kachwaha & Partners

Every year scores of global tourists and pilgrims swoop down on Buddhist destinations in India. But most of the sites have poor amenities and infrastructure.

The International Finance Corporation (IFC) and India’s Ministry of Tourism have together initiated a project to boost tourism infrastructure in the Buddhist circuit. The project spans four sites in India and Nepal tracing the life of Buddha.

The project will adopt public-private partnerships and other funding models to facilitate and promote the development of tourism infrastructure in the Buddhist circuit. The ministry will address issues such as lack of decent roads, transport and wayside amenities, which plague the circuit.

India approached the IFC as the World Bank arm had funded a tourism project in Rajasthan earlier. The idea largely came from the IFC’s support to the development of the Inca Trail at Machu Picchu in Peru. The IFC has engaged Australia-based tourism consultant Trevor Atherton of Atherton Advisory for the project. Kachwaha & Partners’ Sumeet Kachwaha and Ashok Sagar are advising IFC. “Buddhism represents the ethos and heritage of India,” Kachwaha, the managing partner of the firm,” told India Business Law Journal. “Preserving this heritage and developing its potential is our sacred trust and duty.”

Real Estate Deals of the Year

Earnest Towers sets up First International Financial Centre condominium

Value

Principal law firms

US$180 million

Amarchand Mangaldas

AZB & Partners

Mumbai’s Bandra Kurla Complex has emerged as the city’s second financial centre after the downtown Nariman Point. Befitting the status, Earnest Towers, a special purpose vehicle for the area’s First International Financial Centre condominium, has been set up by a clutch of real estate and trading companies – Vornado Realty Trust, Starwood Capital Group, Urban Infrastructure Real Estate Fund, The Chatterjee Group, Hiranandani Properties, Sharanya trading and Jai Corp.

In its first deal, Earnest Towers assigned and transferred six floors measuring 191,000 square feet carpet area to Citibank and Citibank Global. The deal includes around 250 car parking spaces together with a proportionate undivided interest in the building and the leasehold in the land, along with exclusive rights in certain limited common areas and facilities.

AZB & Partners’ Nohid Nooreyezdan led the team which advised Earnest Towers, including finalizing the declaration and by-laws of the condominium and the assignment and transfer to Citibank and Citibank Global.

Amarchand Mangaldas Mumbai-based managing partner Cyril Shroff and real estate partner Sandeep Dave represented Citibank.

JSW group’s acquisition of Maheshwari House in Mumbai

Value

Principal law firms

US$100 million

DM Harish & Co

Hariani & Co

Kanga & Co

Mansukhlal Hiralal & Co

This deal involved a complex structuring in the take-over of the sea-facing Maheshwari House in downtown Mumbai by the JSW group. The prime property owned by Gopal Traders (GTPL) was held by four branches of the Maheshwari family.

The deal was divided into two parts. It involved acquiring the entire paid-up capital of GTPL and then the tenancy rights of all the premises in Maheshwari House from the representatives of the four branches of family. Each of the families held a 25% stake in the company and was represented by a different law firm.

Kanga & Co’s SS Vaidya and Rishiraj Bhatt assisted JSW group to acquire GTPL and the tenancy rights. Kanga & Co’s senior partner ML Bhakta and Minal Sampat also advised one branch of the family.

Ameet Hariani and Aziza Khatri of Hariani & Co represented another branch of the Maheshwari family. Mansukhlal Hiralal & Co and DM Harish & Co were the advisers to the other two branches.

Piramal Realty buys Hindustan Unilever’s Gulita property in Mumbai

Value

Principal law firms

US$84 million

Kanga & Co

Since Ajay Piramal sold off Piramal Healthcare, the group’s drug formulation business, to US drug major Abbott for US$3.7 billion, his realty arm has been flexing its muscle, acquiring real estate from other companies. After a bidding contest against businessmen Gautam Adani and Anil Ambani, Piramal Realty emerged with what is considered a prize catch – Hindustan Unilever’s prime Gulita property in south Mumbai, overlooking the Arabian Sea.

The sale of Gulita, which used to house a training centre, was part of the fast moving consumer goods conglomerate’s strategy to monetize some of its prime real estate in Mumbai. First, it sold its downtown headquarters to India’s premier mortgage lender, Housing Development Finance Corporation, and shifted its headquarters to the suburbs.

Deals of the Year 2012

The winning real estate deals

Deal

Value

Principal law firms

Earnest Towers sets up First International Financial Centre condominium

US$180 million

Amarchand Mangaldas
AZB & Partners

JSW group’s acquisition of Maheshwari House in Mumbai

US$100 million

DM Harish & Co
Hariani & Co
Kanga & Co
Mansukhlal Hiralal & Co

Piramal Realty buys Hindustan Unilever’s Gulita property in Mumbai

US$84 million

Kanga & Co

Deals are listed in order of value. The principal law firms that worked on each deal are listed alphabetically.

Piramal Realty was represented by Kanga & Co’s Dhaval Vussonji and Manisha Paranjape and the company’s in-house counsel Pushkaraj Shenai.

Banking, Finance and Restructuring Deals of the Year

Hindustan Construction’s corporate debt restructuring

Value

Principal law firms

US$1.5 billion

Amarchand Mangaldas

Trilegal

Cash-strapped Hindustan Construction Company (HCC), which has delivered iconic projects such as the Kolkata metro, the Mumbai-Pune expressway and Mumbai’s Bandra-Worli sea link, took on bigger projects and accumulated a huge debt. Servicing the debt has dented the company’s balance sheet. The original tenure of the loans is said to range from one to three years.

The Ajit Gulabchand-backed company said it decided to seek a corporate debt restructuring (CDR) after failing to see expected cash flows, largely due to delays in outstanding payments. The restructuring terms include a moratorium on the principal for two years and an eight-year repayment period. The lenders have also made interest rate concessions for the first few years.

Partners SH Bhojani and Amey Pathak from the Mumbai office of Amarchand Mangaldas acted for HCC. Trilegal Mumbai partner Ameya Khandge advised ICICI Bank and 25 other banks and financial institutions, including State Bank of India and Punjab National Bank. “A critical component of our involvement in the transaction has been working through various inter-creditor issues, especially keeping in mind that security also had to be shared with certain non-CDR lenders who have advanced additional credit facilities to HCC,” Khandge told India Business Law Journal.

IDFC’s medium-term note programme

Value

Principal law firms

US$1.5 billion

Amarchand Mangaldas

Linklaters

This was the first medium-term note (MTN) programme established by a non-bank Indian issuer, and the first by an infrastructure finance company. An MTN is an umbrella instrument that allows companies to raise money in tranches after the final document filing.

IDFC is one of India’s leading infrastructure financing institutions and this was its maiden foray into tapping the international debt markets. Its earlier sorties were equity issuances.

Linklaters acted for the arrangers – Citigroup Global Markets and Royal Bank of Scotland. The MTN programme is listed on the Singapore Exchange. A separate Linklaters team advised the trustee on the transaction. “The MTN programme was set up as a Regulation S programme, but with features that would allow the securities to be sold to US investors in the future, should IDFC wish to prepare an offering document to US standards,” Arun Balasubramanian, lead partner at Linklaters, told India Business Law Journal.

Amarchand Mangaldas partner Niloufer Lam counselled IDFC.

POSCO-Maharashtra’s project financing

Value

Principal law firms

US$500 million

Allen & Overy

DR & AJU Partners

Trilegal

It is only natural that South Korean steel major POSCO would want its first steel plant in India to be close to its customers in Maharashtra in western India. The state is home to a fleet of vehicle manufacturers including Mercedes Benz, Skoda, Tata Motors, Mahindra & Mahindra, General Motors, Audi and Bajaj Auto. The third largest steel maker in the world supplies products to many of these companies.

The plant, located in Raigad, began operating in 2012. Financing was done in three tranches. Standard Chartered Bank provided an external commercial borrowing (ECB) facility to POSCO in two phases to construct the cold-rolled coil and steel plate production facilities. The Export-Import Bank of Korea provided an ECB of US$180 million.

“Separate loan agreements were negotiated and finalized for different lenders in a short timeframe,” Ameya Khandge, a partner at Trilegal, told India Business Law Journal.

These ECBs form part of POSCO’s US$1.5 billion planned outlay to expand the plant capacity. The three loan agreements were negotiated and finalized simultaneously. Over half a dozen lenders were involved in the deal, including DBS, HSBC, Citigroup Global Markets Asia and Sumitomo.

Trilegal was the Indian counsel to all the lenders led by Khandge, counsel Parneeta Singh and Megha Gupta. Allen & Overy’s Ian Powell, Joo Ho Lee and Henry Sohn were the lender’s Hong Kong counsel. DR & AJU Partners’ Yi Hyun Woo was the lender’s legal counsel in Korea.

Restructuring of Lodha group’s convertible debentures

Value

Principal law firms

US$365 million

Clifford Chance

J Sagar Associates

Juris Corp

Kim & Min

O’Melveny & Myers

In one of the largest and most profitable exits in real estate, Deutsche Bank made a cool 55% return on its 2007 investment in Lodha Developers’ subsidiary Cowtown Land Development.

O’Melveny & Myers partners Bertie Mehigan, Damien Coles and Pooja Sinha represented the bank as arrangers in several rounds of restructuring of the US$365 million of convertible debentures issued by Lodha, as well as on related derivative transactions with private equity and hedge fund investors.

The highly structured facility with a history of complex financing issues, involved a contentious negotiation dynamic for the arranger and O’Melveny at the front end with the issuer, and at the back end with the investors. The matter also involved complex cross-border issues and team management as the facility was provided by the arranger’s Singapore branch to an Indian issuer. The arranger’s London branch, pursuant to internal arrangements with the Singapore branch, entered into derivative transactions with various hedge funds based in Singapore, Hong Kong, Korea and the US.

Juris Corp was the Indian counsel for Deutsche Bank. Clifford Chance advised private equity firms – Stark, Citadel and Apollo. Seoul firm Kim & Min advised the investors.

J Sagar Associates partner Varghese Thomas was the Lodha counsel. “There were a lot of challenges concerning the deal, particularly in negotiating the price of the buyout, representation and warranties,” he told India Business Law Journal.

Acquisition finance facility for Binani Industries

Value

Principal law firms

US$336 million

Altius

Ashurst

Jones Day

Stibbe

Buying Belgian company 3B Fibreglass was in sync with Binani Industries’ strategy to expand its presence in the global fiberglass market. Binani’s interests also include cement, zinc, composites and ready-mix concrete. “The acquisition will strengthen our group’s core operations at a global level,” said group chairman Braj Binani.

3B Fibreglass, which has manufacturing plants in Belgium and Norway, is Europe’s leading manufacturer of fibreglass for reinforcement of thermoplastics and thermoset polymer applications, and is a supplier to global leaders in the automotive and wind energy industries among others.

The US$336 million acquisition finance was provided by IDBI Bank as agent and original lender, and Bank of Baroda as security agent. This is one of the few deals where the buyer and lenders for a foreign acquisition were all Indian. Both the banks were counselled by Johan De Bruycker of Altius. Ashurst’s Arnaud Wtterwulghe in Brussels was the lead partner counselling pre-existing lenders.

Jones Day’s Brussels office acted for Platinum Equity as vendor on the 3B Fibreglass sale.

Welspun’s cash tender offer for FCCBs

Value

Principal law firms

US$150 million

Allen & Gledhill

AZB & Partner

Linklaters

This is the first liability management transaction undertaken by an Indian company in over 18 months. According to the Reserve Bank of India, some US$7 billion of Indian foreign currency convertible bonds (FCCBs) are maturing by 31 March 2013. Of these, an estimated US$5 billion in principal amount may not be converted into equity shares, as the current stock prices of issuers are significantly below their conversion prices. Some Indian FCCB issuers are therefore said to be planning liability management transactions in relation to their FCCBs (including cash tender offers and exchange offers).

Deals of the Year 2012

The winning banking, finance and restructuring deals

Deal

Value

Principal law firms

Hindustan Construction’s corporate debt restructuring

US$1.5 billion

Amarchand Mangaldas
Trilegal

IDFC’s medium-term note programme

US$1.5 billion

Amarchand Mangaldas
Linklaters

POSCO-Maharashtra’s project financing

US$500 million

Allen & Overy
DR & AJU Partners

Trilegal

Restructuring of Lodha group’s convertible debentures

US$365 million

Clifford Chance

J Sagar Associates

Juris Corp

Kim & Min
O’Melveny & Myers

Acquisition finance facility for Binani Industries

US$336 million

Altius
Ashurst
Jones Day
Stibbe

Welspun’s cash tender offer for FCCBs

US$150 million

Allen & Gledhill

AZB & Partner
Linklaters

Sembmarine Kakinada’s secured loan facility

US$115 million

Allen & Overy
ALMT Legal
R&A Legal
Rodyk & Davidson

Refinancing loan facility for Essar Service Mauritius

US$75 million

Allen & Overy
Alliance Legal India Partners
Madun Gujadhur Chambers
Richards Layton & Finger
SyCip Salazar Hernandez & Gatmaitan
Walkers

Deals are listed in order of value. The principal law firms that worked on each deal are listed alphabetically.

In December 2011, Welspun India issued tenders to buy back FCCBs worth US$150 million due in 2014. The buyback was aborted as the lenders didn’t agree to Welspun’s demand for a discount. In October 2012, funded by a new foreign currency loan with a five-year maturity, the company bought back FCCBs at an 8% discount.

Linklaters advised JP Morgan Securities in relation to a cash tender offer for US$150 million in 4.5% convertible bonds due 2014 convertible into equity shares or global depository shares of Welspun. Partner Dean Lockhart led the team with Pallavi Gopinath Aney for the dealer manager and tender agent.

AZB & Partners counselled Welspun on Indian law and Allen & Gledhill was the legal adviser to Welspun on Singapore law.

Sembmarine Kakinada’s secured loan facility

Value

Principal law firms

US$115 million

Allen & Overy

ALMT Legal

R&A Legal

Rodyk & Davidson

Singapore’s Sembawang Shipyard, a unit of Semborp Marine and India’s Kakinada Seaports formed a joint venture in 2009 to build an offshore service facility for ships. India had no such facilities, and marine experts said that Indian shipping companies were losing business worth US$15 million-20 million each year as they had to rely on repair facilities abroad.

Axis Bank provided a US$115 million secured loan facility for establishing a one-stop integrated offshore repair facility catering to offshore vessels and merchant ships at Kakinada Port in the southern Indian state of Andhra Pradesh. “This deal is unique as it is strategically located in the east coast of India, one of the world’s key oil and gas exploration areas,” Allen & Overy partner Kayal Sachi told India Business Law Journal. Sachi along with Nelson Chua counselled Axis Bank.

kayal-sachi-partner-allen-overy

ALMT Legal was the legal adviser to the financier on Indian law. Rodyk & Davidson was the borrower’s lead counsel. R&A Legal advised the borrower on Indian law.

Refinancing loan facility for Essar Service Mauritius

Value

Principal law firms

US$75 million

Allen & Overy

Alliance Legal India Partners

Madun Gujadhur Chambers

Richards Layton & Finger

SyCip Salazar Hernandez & Gatmaitan

Walkers

The Reserve Bank of India has allowed Indian companies to take advantage of cheaper US dollar loans and repay rupee loans which were taken for capital expenditure. Essar Service Mauritius, a subsidiary of business processing outfit Aegis, used this opportunity to refinance its bridge loan.

Allen & Overy acted for Deutsche Bank, UBS and certain other lenders on matters of English, Australian, New York and Dutch law in connection with the refinancing of the bridge loan. Partner Kayal Sachi led the team with Gautam Narasimhan and Kunal Katre.

The deal, which was wrapped up in just three weeks, involved five arrangers and lenders and many jurisdictions including the US, England, the Philippines, Mauritius, India, the Netherlands and Australia.

Alliance Legal India Partners acted as the lenders legal counsel in India. Walkers represented the lenders in the Cayman Islands. Richards Layton & Finger represented the lenders in Delaware. Madun Gujadhur Chambers was the counsel in Mauritius. SyCip Salazar Hernandez & Gatmaitan acted for the lenders in the Philippines.

Disputes of the Year

Precision Cars India v Porsche Middle East & Africa

Value

Principal law firms

Not applicable

Clasis Law

KJ John & Co

German luxury car manufacturer Porsche and its subsidiary Porsche Middle East & Africa (PME) terminated an agreement with their Indian importer – Precision Cars India (PCI).

PME’s agreement provided for applicable laws and the venue of arbitration to be outside India, and for arbitration to be conducted under the rules of the London Court of International Arbitration. PCI challenged the termination of its agreement before a district court in Rajasthan. Both the district court and the Rajasthan High Court Jaipur Bench, in a subsequent appeal by PCI, concluded that the agreement amounted to exclusion of the applicability of Part I of India’s Arbitration and Conciliation Act and therefore an application under section 9 was not maintainable.

PCI challenged the order passed by the high court before the Supreme Court.

The Supreme Court dismissed PCI’s appeal, reiterating that Indian courts were not allowed to interfere in foreign-seated arbitrations. The dispute went through all three courts to a final resolution in just five months, upholding at each level the agreement between the parties to arbitrate outside India.

Clasis Law’s Sumeet Lall represented Porsche and its subsidiary.

PCI was advised by KJ John’s Pratap Venugopal.

Builders’ Association v cement manufacturers

Value

Principal law firms

US$1.2 billion

Amarchand Mangaldas

Seth Dua & Associates

Luthra & Luthra

PH Parekh & Co

Cement companies have been under scrutiny since 2010 for alleged price inflation and reducing production. The Builders’ Association of India had hauled the Cement Manufacturers’ Association to the anti-monopoly watchdog, the Competition Commission of India (CCI), complaining about anti-competitive activities and cartelization.

After much investigation, the CCI in June 2012 found 11 cement companies and their association in violation of the provisions on anti-competitive agreements, including cartels, in the Competition Act, 2002. The CCI determined that some of the cement majors manufactured far below their capacity to reduce supply and raise prices and imposed a US$1.2 billion penalty. “This is the first time that the CCI imposed such heavy penalties on companies for cartelization in any sector,” Atul Dua, the founding partner of Seth Dua & Associates, which represented the Builders’ Association, told India Business Law Journal.

Luthra & Luthra’s GR Bhatia represented Jaypee Cement. PH Parekh & Co advised Ultratech Cement and Grasim Cement before the CCI. Pallavi Shroff, senior partner in the Delhi office of Amarchand Mangaldas, acted for Associated Cement Company.

Essar Oil v United India Insurance

Value

Principal law firms

US$900 million

Agarwal Law Associates

Bharucha & Partners

Clyde & Co

Kennedys

Tuli & Co

This is one of the largest disputed insurance claims in Indian history. The case also involved the first advanced loss of profit policy issued in India. It was taken by Essar Oil for building its Gujarat refinery. Before the construction had finished the refinery was struck by a cyclone in June 1998. Essar Oil asserted that the cyclone delayed construction and claimed almost US$900 million for the profit it said it had lost because it could not start operations in time and for the physical damage caused to the refinery.

United India rejected the loss of profits claim on the grounds that, irrespective of the cyclone, Essar Oil would not have commenced operations at its refinery on time, due to a lack of environmental permissions, major funding shortfalls and much slower construction than what Essar Oil had claimed.

Although this was a domestic arbitration, the tribunal was made up of eminent international jurists. After four sets of hearings spread over 12 months, United India succeeded in its defence. Tuli & Co’s Neeraj Tuli advised United India on Indian law. Nick Thomas and Nick Carnell of Kennedys’ London and Dubai offices acted for the insurance company on international law.

Essar Oil was represented at various stages by MP Bharucha of Bharucha & Partners, Mahesh Agarwal of Agarwal Law Associates and Clyde & Co’s Bryan Young, who briefed senior advocates Harish Salve, CA Sundaram, Milind Sathe, Mihir Thakore, and Andrew Green QC.

Roche v Cipla

Value

Principal law firms

Not applicable

Anand and Anand

Singh & Singh

Big pharma and generic drug makers in India have always been at loggerheads. And the innovation versus imitation debate never ends.

After a four-year court battle, Delhi High Court in September dismissed F Hoffmann-La Roche’s suit accusing Cipla of infringing the patent for its lung cancer drug Tarceva. The court held that Cipla’s Erlocip had a different molecular structure and didn’t infringe upon Roche’s offering. The verdict made global headlines.

A month later, Roche appealed and a division bench of Delhi High Court issued a notice to Cipla to prove that its anti-cancer drug did not infringe Roche’s offering. The next hearing is in January 2013.

Roche was represented by Anand and Anand. Senior advocate Harish Salve, a former solicitor general of India, and advocate Prathiba Singh of Singh & Singh advised Cipla.

GMR dispute over Male International Airport

Value

Principal law firms

Not applicable

Eversheds

Link Legal

Pinsent Masons

Straits Law

The GMR-Male airport imbroglio ended in December when the Maldives government took over the airport. The Singapore Court of Appeal held that Maldives had the right to annul a contract it had signed with India’s GMR Group, barely a day before the government-set deadline to throw out the airport operator expired.

GMR, in a tie-up with Malaysia Airports Holdings, had won the contract to build Male International Airport in 2010, when the government was headed by former president Mohamed Nasheed. The project, the largest single investment in the history of Maldives, began facing problems soon after a regime change in the country in early 2012. The new government, headed by President Mohamed Waheed, asked GMR to temporarily halt the development of a new terminal at the airport.

Link Legal partner Milanka Chaudhury represented GMR Male International Airport in the arbitration with Maldives Airports Company (MACL). Pinsent Masons was the GMR unit’s international counsel.

Eversheds advised the government of Maldives. Straits Law, Singapore, acted for MACL.

Deals of the Year 2012

The most significant disputes

Deal

Value

Principal law firms

Precision Cars India v Porsche Middle East & Africa

Not applicable

Clasis Law
KJ John & Co

Builders’ Association v cement manufacturers

US$1.2 billion

Amarchand Mangaldas
Seth Dua & Associates
Luthra & Luthra
PH Parekh & Co

Essar Oil v United India Insurance

US$900 million

Agarwal Law Associates
Bharucha & Partners
Clyde & Co
Kennedys
Tuli & Co

Roche v Cipla

Not applicable

Anand and Anand
Singh & Singh

GMR dispute over Male International Airport

Not applicable

Eversheds
Link Legal
Pinsent Masons

Straits Law

The disputes are not listed in rank order. The principal law firms that worked on each deal are listed alphabetically.