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StanChart PE, Merlion Complete ABG Shipyard Exit

28 June, 2011

Standard Chartered Private Equity and Merlion India Fund have completed their exit from ABG Shipyard by selling over a 6 per cent stake in the company for Rs 114 crore through open market transactions on Tuesday. While Standard Chartered Private Equity sold all of its 5.41 per cent holding, Merlion(a joint venture between Standard Chartered Private Equity and Singapore’s sovereign wealth fund Temasek) sold its remaining stake of a little less than 1 per cent.

The shares were sold for Rs 355.34 on the exchanges. ABG Shipyard scrip closed at Rs 361.8 on Tuesday at BSE, down 1.96 per cent. 

The twin transaction also marks the final exit of all the private equity investors from ABG, which had also raised funding from New York Life Investment Management India (Jacob Ballas Capital) and Leverage India Fund (IL&FS Investment Managers). The PE investors had picked up the stake in ABG before its IPO in 2005.

Two years back, Standard Chartered Private Equity had increased its stake in ABG Shipyard from 1.3 per cent in June, 2008 to 5.41 per cent by March, 2009 (during the downturn). It had bought initial part of the stake from open markets in 2006-end for a share price of Rs 217.

But the bulk of the shares were purchased in the October-December quarter 2008 when the scrip price of ABG Shipyard crashed to a low of Rs 80 a share. In the subsequent quarter when Standard Chartered PE bulked up again, the share price had dropped further, bottoming out at Rs 62. This means the PE firm has struck a multibagger on the deal.

Merlion, a joint venture between Standard Chartered Private Equity and Temasek, held as much as 18.3 per cent stake pre-IPO, which diluted to 15.2 per cent post-IPO. It had earlier sold shares in 2007 when the share price was hovering around Rs 350-Rs 400 per scrip and had been holding on its stake ever since, only to start selling in December 2010. Merlion had invested in ABG at Rs 113 a piece.

 

 


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StanChart PE, Merlion Complete ABG Shipyard Exit

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