According to people familiar with the matter, the Tata Group's acquisition of Wistron's manufacturing facility, which will make it the first Indian firm to assemble iPhones, is worth a total of $750 million, including debt. According to them, both parties signed the takeover agreement on Nov 8.
As per the people cited above, the plan announced on October 27 stated that Tata would pay $125 million, but this is only the equity payment. Another $75-80 million in term debt in the target company will now be transferred to the acquirer, they said. In addition, the parent company made a $550 million inter-corporate loan to Wistron India. ET spoke with multiple people on both sides as well as others with knowledge of the situation to gather information.
The Taiwanese parent infused the $550 million inter-corporate loan as an unsecured working capital loan in its Indian arm against receivables from Apple, the company whose products were manufactured by the vendor at the Kolar plant, which employs 14,000-15,000 people. Tata Electronics Pvt Ltd (TEPL), which has a manufacturing plant in Hosur, Tamil Nadu, has acquired the local Wistron unit.
TEPL is a wholly owned subsidiary of Tata Sons. Given Apple's impeccable credentials, banks will refinance the facility on Tata's behalf in a process known as receivable financing or "factoring." Citi, the transaction's adviser, along with AZB, is thought to be leading this initiative as well. Such loans are typically syndicated or sold down by banks to other financial institutions and peers.
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