JP Morgan to pick up stake for $400 mn in SKIL Infrastructure

JP Morgan Singapore will be investing $ 400 mn in Nikhil Gandhi promoted –SKIL Infrastructure Ltd. JP Morgan is likely to pick a little less than 20% stake, valuating the deal at $2.2 bn according to sources familiar with the deal details.

SKIL Infrastructure Ltd has filed draft red herring prospectus (DRHP) with market regulator Sebi for a Rs 1,125 crore initial public offering.

SKIL Infra will use $250 mn to repay the debt of Pipavav Shipyard. SKIL had earlier acquired 19.43% stake in its flagship Pipavav Shipyard from its partner, engineering and construction firm Punj Lloyd, for Rs 656.4 crore ($145 million). SKIL now holds 45% in Pipavav Shipyard. Out of this 44.81% stake of SKIL Infra is pledged.

The company plans to repay the entire debt of Pipavav Shipyard after which it will look at diluting stake in the company. The source added that the company is in talks with Hyundai to sell stake.

SKIL Infra plans to use the remaining $150 mn out of the $ 400 mn to acquire stake in ports & logistics business.

SKIL Infra plans to use Rs 800 crore from the IPO issue proceeds for retiring high-cost debt of the company, which stood at Rs 1,351 crore as of March 31, 2011.