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Clearwater In Part-Exit Mode; Offloads Another 2% in Sayaji Hotels

01 June, 2011

Private equity firm Clearwater Capital Partners has sold 2 per cent stake in hospitality firm Sayaji Hotels to its promoters for Rs 4.68 crore in yet another round of part exit with 1.9x return on its initial tranche of the five-year-old investment, according to VCCircle estimates.

Two weeks ago, Clearwater sold 2.85 per cent of the Vadodara-based firm for Rs 6.5 crore or $1.4 million to the promoters, with the same returns.

Although the promoters have picked up close to 5 per cent through open market purchases, the maximum allowed in a year under the creeping acquisition norms without triggering a mandatory open offer, Clearwater can continue to offload its stake by selling to other investors in the open market.

Clearwater’s part-exit comes one year after it hiked its holding in the hotel firm to 32.87 per cent.

The investment fund had picked 14.9 per cent stake in the hospitality and restaurant chain company, with an investment of around Rs 11.8 crore in May, 2006. Clearwater also invested through foreign currency convertible bonds (FCCBs) which were converted into equity last year, giving it a large minority stake in the company.

The New York-based special situations fund held FCCBs worth $7.5 million in the company, which had been converted into equity at Rs 75 per share last year, giving it 32.87 per cent stake. It also came up with an open offer last year at a price of Rs 115.73 (including interest payment for delay in the offer), but could not find many takers.

Sayaji Hotels’ scrip declined 2.81 per cent and was trading at Rs 117.5 at BSE on Wednesday. Clearwater remains the second largest shareholder with around 28 per cent stake, behind the promoters who now together own 40 per cent.

As of March, 2011, the US-based foreign institutional investor (FII) Acacia Partners held 7.5 per cent stake through its various funds in Sayaji. Sayaji operates hotels in Vadodara, Indore and Pune. It also has two subsidiaries, Barbeque Nation Hospitality and Malwa Hospitality, and operates a restaurant chain under the Barbeque Nation brand.

 


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Clearwater In Part-Exit Mode; Offloads Another 2% in Sayaji Hotels

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