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Merlion India Sells More Stake In ABG Shipyard

By Pallavi S

  • 03 Dec 2010

Merlion India Fund, a joint venture between Standard Chartered Private Equity and Temasek, has sold a part of its pre-IPO investment in shipping firm ABG Shipyard for Rs 51 crore ($11.4 million) with 3.4x (2.4x net) return.

Merlion had co-invested along with IL&FS Private Equity (Leverage India Fund) and Standard Chartered PE in July 2005, months before the public float of ABG Shipyard. The shares were picked through a mix of fresh issue and purchase from the promoters at Rs 113 a piece.

It has sold 1.3 million shares of around 4.4 million shares (representing around 8% stake) at Rs 389.6 per share on Wednesday and Thursday, much of which was acquired by the promoters and Reliance Mutual Fund.

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Merlion held as much as 18.3% pre IPO which diluted to 15.2% post IPO. It had earlier sold shares in 2007 when share price was hovering around Rs 350-400 per share and had been holding on its stake ever since.

Last year, Leverage India Fund had made a part exit from ABG Shipyard Ltd when it sold 0.5% with an estimated return of around 20%. At the same time, Standard Chartered Private Equity had increased its stake in ABG Shipyard from 1.3% in June 2008 to 5.41% by March 2009. It had bought initial part of the stake from open markets in 2006 end for a share price of Rs 217.

ABG Shipyard also raised private equity funds from New York Life Investment Management India Ltd that exited its investment by June 2007.

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ABG Shipyard that had lost a corporate takeover battle for Great Offshore to arch rival Bharati Shipyard had apparently also lost out in striking a deal with ICICI Ventures for acquiring another shipbuilder Tebma recently. Bharati Shipyard pipped ABG Shipyard by striking its second deal in less than a year and is acquiring 51% stake in loss-making Chennai-based Tebma Shipyards for Rs 75.75 crore.

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