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Anil Agarwal’s Volcan secures 11.4% stake in Anglo American

LiveMint logoLiveMint 14-04-2017 Thomas Biesheuvel

London: Billionaire Anil Agarwal has secured an 11.4% stake in Anglo American Plc after the Indian businessman said last month that he planned to build a £2 billion ($2.5 billion) holding in the miner.

Agarwal’s Volcan Holdings Plc owns about 160.7 million shares in Anglo American, according to a regulatory filing Thursday. Based on the target amount, that implies he bought the shares at an average price of £12.44 per share. Anglo traded at £11.70 pounds a share at 4.04 pm in London.

Agarwal’s stake makes him the second-biggest investor behind South Africa’s Public Investment Corp. Agarwal said last month that the investment was in a personal capacity and that he had no plans to act as an activist.

Still, his ultimate intentions remain unclear as the unusual deal structure he’s used has led analysts to speculate that he might be planning to force a break up of or a merger with the century-old miner.

He isn’t using his fortune to buy the shares, instead borrowing from bond investors through a three-year note paying a coupon of 4.125%. The structure means he effectively rents the shares until the bond matures, with little benefit from a rising stock price.

Agarwal’s Volcan Investments Ltd. has a controlling stake in Vedanta Resources Plc, which in turn controls Vedanta Ltd. and Hindustan Zinc Ltd. After a failed approach to merge Hindustan Zinc with Anglo last year, Agarwal said the combination was a “good match” and that “one and one wasn’t going to be two, but 11.” Bloomberg

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