AIM-listed investor Eredene Capital Plc has exited its investment in port operations and marine services provider Ocean Sparkle Ltd (OSL) for £8.2 million ($12.9 million or Rs 75 crore), as per a company statement.
The stake was acquired by Mauritius-based Infrastructure India Holdings Fund LLC, a fund managed by Kris Fund Management. Kaup Capital was the advisor to Kris Fund Management.
VCCircle first reported that Eredene is expected to sell its stake at around Rs 75 crore and by June, the deal is expected to be closed with an existing investor in the company. Earlier, it was also in talks with another existing investor, Standard Chartered Private Equity, for the transaction.
Eredene purchased the stake through an investment of around Rs 52 crore (£7.3 million back then) in mid-2010, in a secondary deal where it bought out the 8.2 per cent stake held by Swiss Technology Venture Capital Fund. But the stake was diluted with further share issue.
According to the firm, the transaction represents a gross premium of 39 per cent over investment cost in Indian Rupee terms. The returns on repatriation will be much lower due to depreciation of Indian currency against the UK Pound.
The sale is part of Eredene’s strategy of realising its investments in India and returning the capital to shareholders.
Alastair King, founder and chief executive of Eredene, said, “The sale provides a healthy return on Eredene’s original investment in OSL and it is also at a premium to the book value of the investment. This is an important milestone in the company’s strategy of making a phased realisation of its investments in India to maximise value and return capital to shareholders.”
Eredene has so far made 11 investments in various infrastructure projects in India. These include nine in port services, container logistics and distribution warehousing; one in IT offices and one in a large-scale affordable housing development. Seven of its projects are revenue-generating and two investee companies are profitable and dividend-paying.
Some of its key portfolio companies are Sattva CFS and Logistics Ltd, Apeejay Infralogistics Pvt Ltd, Contrans Logistics Pvt Ltd, MJ Logistics Services Ltd and Sribha Infrastructure Pvt Ltd. So far, the firm has invested close to £50 million in India.
Eredene said last December that it was selling its stake in Mumbai-based Matheran Realty Pvt Ltd and its subsidiary Gopi Resorts Pvt Ltd to an undisclosed buyer.
In March, it had appointed investment banker MAPE to handle the sale of its stake.
For Kaup Capital, this extends its investment in OSL, which operates one of India’s largest fleet of harbour tugs with a presence in most of the leading ports in the country. It also counts Gujarat Pipavav Port Ltd as a portfolio firm.
Founded in 1995, Hyderabad-based OSL owns and manages a fleet of 82 vessels, comprising 59 tugs, 5 dredgers, 5 barges, 5 mooring boats and 8 pilot launches. Other investors in OSL include Standard Chartered Private Equity, India Equity Partners and IFC.
(Edited by Sanghamitra Mandal)