Eredene Capital PLC, a London based AIM listed investor in Indian infrastructure, is picking up a 8.22% stake for $11.1 million in Ocean Sparkle Limited (OSL), a Hyderabad based port operations and marine services company in India. The investment will be made using the Eredene Group’s existing cash reserves, the publicly listed investor said in a statement. The recent round of equity infusion by Eredene values the Hyderabad based port & services company at $135 million.
OSL founded in 1995, is profitable and dividend paying. It generated revenue of $40 million, net profits of $7.88 million and reported net assets of $41.56 million in the year ended 31 March 2009. OSL owns and manages a fleet of 82 vessels, comprising 59 tugs, 5 dredgers, 5 barges, 5 mooring boats and 8 pilot launches. It services 18 ports across India and also has three joint ventures in India with the Port of Singapore Authority (Marine). The group also has a joint venture operation in Oman.
This is a secondary sale transaction where Eredene is buying the stake from Swiss Technology Venture Capital Fund Private Ltd, which is nearing the end of its fund life, it said in a statement. The Swiss Technology Venture Capital Fund has BTS India Advisors as its on- the- ground fund managers. According to its website, BTS had invested Rs 5.4 crore in Ocean Sparkle in December 2002 which would make it one of the most profitable recent exits.
India Equity partners, a Mumbai based $300-million private equity fund, is another investor in Ocean Sparkle. IEP bought the stake from Andhra Pradesh Industrial Corporation Venture Capital in a secondary transaction.
“Eredene has acquired stake from the Swiss Fund. The fund is a closed end fund and is now nearing its fund life. Others investors in OSL include IFC,” Ranveer Sharma, Principal, Eredene capital Plc told VCCircle.
The Ports Investor
“Our investment in OSL is in line with Eredene’s investment strategy of being a specialist investor in ports & port services sector. OSL is – a market leader in port services in India; present across all major ports in India. It has a world class JV partner, PSA (Port of Singapore Authority), with whom OSL has three joint ventures for port services in India; and it has a high class long standing management team with first hand operational experience in the port services sector,” Sharma, said.
Recently, a consortium of private equity firm including Eredene Capital Plc won the bid to build and operate the £207 million ($312 million or Rs 14,336 crore) Container Terminal at Ennore Port in Tamil Nadu. Ennore Port is one of the 13 major ports in one of the world’s fastest growing economies. The consortium with Eredene includes Spanish port operators Grup Marítim TCB SL, international construction group Obrascón Huarte Lain SA, and India’s Lanco Infratech Ltd.
Eredene, founded in 2005, raised $110 million in early 2006 of which it has committed around $100 million across nine projects in India. Eredene till now has essentially been a ports investor with a portfolio comprising three container freight stations, an inland container depot, a large scale warehousing and distribution operation, two logistics parks and, an IT office complex.
Besides Ennore, Eredene has also been shortlisted for two other port projects in India. One is the New Mangalore Port Container Terminal where Eredene consortium includes TCB and Mumbai Port Indira Docks Project where it is participating with Conti 7 and Master Group.
It is also expecting first close of its $300-million private fund by the end of this year.