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COMPETITION COMMISSION OF INDIA
Combination Registration No. C-2024/06/1160
6th August 2024
Notice under Section 6(2) of the Competition Act, 2002 given by Re Sustainability
Limited, Mumbai Waste Management Limited, Ramky Sustainability Solutions Private
Limited, Metropolis Investment Holdings Pte. Ltd., Mr. Alla Ishaan, Mr. Ayodhya Rami
Reddy Alla, RK Ventures, Ms. A. Veeraraghavamma, and Mr. Alla Sharan
CORAM:
Ms. Ravneet Kaur
Chairperson
Mr. Anil Agrawal
Member
Ms. Sweta Kakkad
Member
Mr. Deepak Anurag
Member
Order under Section 31(1) of the Competition Act, 2002
1.
On 20th June 2024, the Competition Commission of India (Commission) received a
notice (Notice) under Section 6(2) of the Competition Act, 2002 (Act), given by Re
Sustainability Limited (ReSL); Mumbai Waste Management Limited (MWML);
Ramky Sustainability Solutions Private Limited (RSSPL); Metropolis Investment
Holdings Pte. Ltd. (Metropolis); Mr. Alla Ishaan (Ishaan), Mr. Ayodhya Rami Reddy
Alla, RK Ventures, Ms. A. Veeraraghavamma and Mr. Alla Sharan (collectively
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referred to as Founding Group). [ReSL, MWML, RSSPL, Metropolis and Founding
Group are collectively referred to as the Notifying Parties].
2.
The Notice was filed inter alia pursuant to the Composite Scheme of Arrangement filed
by ReSL, MWML, and RSSPL with the Hon’ble National Company Law Tribunal,
Hyderabad Bench (NCLT) on 10th February 2024 (Scheme).
3.
Certain consequential transactions pertaining to ReSL’s subsidiaries and business
undertakings will also take place, to the give effect to the demerger. These consequential
transactions are captured in the Restructuring Implementation Agreement dated 18th
January 2024 (IA), entered into between ReSL, RSSPL, Metropolis, Ishaan, and other
existing shareholders of ReSL. Further, in order to record the amended rights and
obligations of Metropolis and the Founding Group in relation to ReSL, Ishaan,
Metropolis and other shareholders of ReSL have executed an amended and restated
Shareholders’ Agreement dated 18th January 2024.
4.
The “Proposed Combination” envisages restructuring the existing business of ReSL and
its subsidiaries and joint ventures through the demerger of the municipal solid waste
(MSW) business (MSW Business) and the waste-to-energy (WTE) business (WTE
Business) to a newly incorporated entity i.e., RSSPL, in accordance with the Scheme.
The businesses of certain subsidiaries of ReSL in Oman, Saudi Arabia and United Arab
Emirates (Middle East Business) will also be demerged to RSSPL. [The MSW
Business, the WTE Business and the Middle East Business are collectively referred to
as the Demerged Businesses. The businesses that will be retained by ReSL post the
Proposed Combination are referred to as the Retained Businesses].
5.
Pursuant to the Proposed Combination, the rights of Metropolis and the Founding Group
will be amended such that the Founding Group will cede certain rights in the Retained
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Businesses which will continue to be housed ReSL, and Metropolis will cede certain
rights in the Demerged Businesses to be housed in the RSSPL.
6.
In terms of Regulation 14 of the Competition Commission of India (Procedure in regard
to the transaction of business relating to combinations) Regulations, 2011, vide letter
dated 8th July 2024, certain information and clarifications were sought from the
Notifying Parties. The Notifying Parties submitted response vide communication dated
15th July 2024.
7.
ReSL is a public unlisted company. Metropolis holds ~60% shareholding (on a fully
diluted basis) in ReSL and the remaining ~40% shareholding (on a fully diluted basis)
is held by members of the Founding Group. In India, ReSL is operating in the business
of industrial waste management, municipal solid waste management, bio-medical waste
management, operation of waste to energy plants, recycling, and other related
environmental services in India.
8.
MWML is a wholly owned subsidiary of ReSL. Post the proposed combination, MWML
will amalgamate into ReSL and cease to exist as an independent entity. MWML is
engaged in the industrial waste management and the biomedical waste management
business in India.
9.
RSSPL is a newly incorporated company. Post the proposed combination, RSSPL will
house the Demerged Businesses of ReSL and its shareholding will mirror the
shareholding of ReSL. RSSPL will be engaged in the Middle East Business, both
directly (case to case basis) and indirectly through certain companies and joint ventures
in which RSSPL will hold shareholding. The Middle East Business broadly involves
bio-medical waste management services, MARPOL (ship waste management),
engineering procurement and construction services relating to waste management.
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10.
Metropolis is an investment company incorporated under the laws of Singapore. It is
registered as a Foreign Venture Capital Investor under the SEBI (Foreign Venture
Capital Investor) Regulations, 2000. Metropolis is indirectly wholly owned by
investment funds, vehicles and/or accounts advised and managed by various subsidiaries
of KKR & Co. Inc. (KKR). KKR is a global investment firm that offers alternative asset
management as well as capital markets and insurance solutions. KKR sponsors
investment funds that invest in private equity, credit and real assets and has strategic
partners that manage hedge funds. In India, KKR is engaged in the provision of
investment advisory services.
11.
The members of the Founding Group are part of the Ramky group, which are engaged
in a range of activities in India, such as waste management (through ReSL),
development of infrastructure and real estate, and pharmaceuticals. The Founding
Group comprises individual family members and partners of RK Ventures (on behalf of
RK Ventures). Mr. Alla Ishaan, Mr. Ayodhya Rami Reddy Alla, Ms. A.
Veeraraghavamma and Mr. Alla Sharan are individual family members who hold shares
in ReSL.
12.
The Commission noted that the Proposed Combination is in the nature of an internal
restructuring. Accordingly, the Commission observed that, based on the information
available, there is no change in the market dynamics as a result of the Proposed
Combination.
13.
Considering the material on record, including the details provided in the Notice and the
assessment of the Proposed Combination based on factors stated in Section 20(4) of the
Act, the Commission is of the opinion that the Proposed Combination is not likely to
have appreciable adverse effect on competition in India, and therefore, the Commission
hereby approves the Proposed Combination under Section 31(1) of the Act.
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14.
This order may be revoked if, at any time, the information provided by Notifying Parties
is found to be incorrect.
15.
The information provided by Notifying Parties shall be treated as confidential in terms
of and subject to provisions of Section 57 of the Act.
16.
The Secretary is directed to communicate this order to Notifying Parties.
