Foreign ship cos race for stake in ABG Heavy
Port service provider, ABG Heavy Industries, which recently offloaded 12% to the Port of Singapore Authority (PSA), has been approached by a couple of private equity players.
By Anto T Joseph, TNN |
MUMBAI: Two foreign shipping lines, Zim of Israel and Geneva-based Mediterranean Shipping Company (MSC), the world’s second-largest container line, are believed to have approached ABG Heavy Industries (ABGHIL) to pick up an equity stake. The Mumbai-based port service provider, which recently offloaded 12% to the Port of Singapore Authority (PSA), has also been approached by a couple of private equity players.
Sources said ABGHIL is looking to raise capital to fund its expansion projects. The promoters of the company — the Agarwals — are also looking to sell stakes in two subsidiary companies operating container terminals at Kolkata and Kandla.
Investment bank SSKI is believed to be undertaking a valuation exercise for ABGHIL, as the first step towards inviting strategic investors. Though PSA doesn’t enjoy any first right of refusal, the international port operator is also interested in picking up additional stake in the port operator.
When contacted by ET, ABGHIL promoter and managing director Saket Agarwal said a valuation exercise is currently on. “We are in a capital-intensive sector, and need capital to grow. We are looking at bringing in investors. But our talks are at a very preliminary stage,” said Mr Agarwal. He and his younger brother Rishi Agarwal hold around 60% of ABGHIL.
While its equity sale is gaining ground, the company is also looking to restructure its business activities. The company may look at demerging its crane business, which is currently under ABGHIL, said sources. The board has decided to rename the company as ABG Infralogistics subject to shareholders’ approval.
The company’s capital expansion plans include Rs 300 crore investment in its crane manufacturing capacity, and up to Rs 2,000 crore investment in the port sector.
It is bidding for Paradip coal terminal as well as the Karwar deep sea port. Plans are also afoot to invest in a new crane manufacturing facility at Ransai in Navi Mumbai. It also plans to bid for the proposed minor terminal of the 330-metre quay line at the Jawaharlal Nehru Port Trust (JNPT).
ABGHIL currently operates the Kolkata container terminal under a unique own-operate-maintain contract since April 2005, and has handled 170,000 containers (20ft equivalent container units or TEUs) during the last financial year (2006-07). It hopes to handle over 200,000 TEUs during the current fiscal.
Sources said ABGHIL is looking to raise capital to fund its expansion projects. The promoters of the company — the Agarwals — are also looking to sell stakes in two subsidiary companies operating container terminals at Kolkata and Kandla.
Investment bank SSKI is believed to be undertaking a valuation exercise for ABGHIL, as the first step towards inviting strategic investors. Though PSA doesn’t enjoy any first right of refusal, the international port operator is also interested in picking up additional stake in the port operator.
When contacted by ET, ABGHIL promoter and managing director Saket Agarwal said a valuation exercise is currently on. “We are in a capital-intensive sector, and need capital to grow. We are looking at bringing in investors. But our talks are at a very preliminary stage,” said Mr Agarwal. He and his younger brother Rishi Agarwal hold around 60% of ABGHIL.
While its equity sale is gaining ground, the company is also looking to restructure its business activities. The company may look at demerging its crane business, which is currently under ABGHIL, said sources. The board has decided to rename the company as ABG Infralogistics subject to shareholders’ approval.
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Apart from PSA, the two other prime investors are ICICI Prudential (6%) and Kotak (5%). The remaining stake is held by the public. Sources said PSA picked up the stake at Rs 325 per share, when the price was at around Rs 180. On BSE, the scrip moved up to Rs 286 on Monday.The company’s capital expansion plans include Rs 300 crore investment in its crane manufacturing capacity, and up to Rs 2,000 crore investment in the port sector.
It is bidding for Paradip coal terminal as well as the Karwar deep sea port. Plans are also afoot to invest in a new crane manufacturing facility at Ransai in Navi Mumbai. It also plans to bid for the proposed minor terminal of the 330-metre quay line at the Jawaharlal Nehru Port Trust (JNPT).
ABGHIL currently operates the Kolkata container terminal under a unique own-operate-maintain contract since April 2005, and has handled 170,000 containers (20ft equivalent container units or TEUs) during the last financial year (2006-07). It hopes to handle over 200,000 TEUs during the current fiscal.
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