ANIL Agarwal made a 6% profit from his £3.5bn investment in Anglo American, said Reuters adding that the return was paltry given that the UK-listed group’s shares rose 50% in the two years Agarwal’s holding company, Volcan Investments, held the shares.
Volcan said last week that it intended with unwind is holding in Anglo American by repaying debt with 247.1 million Anglo shares. After paying the loan, Volcan would have been left with 1.9% in Anglo which it sold on the open market for a gross profit of £519m.
Once coupon payments and investment banking fees are factored in, the net profit falls to between £196.25m and £213.7m, or 5.7% to 6.1% of the original deal size, said Reuters.
Under the terms of the original deal, Volcan borrowed £3.5bn through the issuance of a mandatory convertible bond arranged by US investment bank JPMorgan to fund the acquisition, the news agency said.
