Blackstone has acquired 10.4% stake in logistics major Allcargo Global Logistics (AGL) for Rs 242 crore. The PE major has paid Rs 934 per share, a 30% premium on the last 15-day traded price.
AGL is convening a shareholders general meeting on March 19, 2008, to seek their approval. On BSE, the stock of AGL rose 8% to Rs 772.50 on Wednesday. AGL’s CMD Shashi Kiran Shetty said Blackstone could buy shares from the market and increase its stake to a shade below 15%. “We will be utilising these proceeds for the proposed capital expenditure to buy cranes and expand our inland container depot (ICD) business,” said Mr Shetty.
The deal involves stake sale through equity shares, fully and compulsorily convertible debentures (FCCDs) and warrants. AGL issued 1,000 equity shares of Rs 10 each at Rs 934/share. It also issued 10.8 lakh FCCDs of Rs 10 each convertible into same number of equity shares on completion of 18 months. AGL also issued 15.13 lakh warrants of Rs 10 each convertible into same number of shares at the option of investors within 18 months. The price range was between Rs 934 and Rs 1,284 per warrant. On subscription, investors would have to pay Rs 194 per warrant.
AGL is developing container freight stations and ICDs in different parts of India. It will invest around Rs 100 crore to acquire different capacity cranes used in construction activities.
Mr Shetty said the Belgian logistics company — Ecu Line, which AGL had taken over in 2006, is being turned around.
“It recorded an EBITDA of around 12 million euros in both the years after acquisition. We hope to increase it to 18 million euros next year,” said Mr Shetty. “We have laid off around 70 people in Ecu Line’s foreign operations and moved many functions including corporate financing, documentation and billing back home,” he said.
“With the investment by Blackstone and their involvement in AGL, we will be able to further explore the immense opportunities in the logistics space in India and globally,” he adds.
Source: Economic Times