BackDeals Buzz: Global energy giants line up for BPCL sale
In other news, Infrastructure focused Sadbhav group is merging its two listed entities Sadbhav Engineering Ltd, the flagship EPC services business and its listed subsidiary Sadbhav Infrastructure Projects Ltd, which builds and owns roads, ending the latter's short four year stint as an independently listed company
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Global energy giants line up for BPCL sale
Saudi Aramco, Rosneft, Kuwait Petroleum, ExxonMobil, Shell, Total SA and Abu Dhabi National Oil Co. are among companies that have had conversations with the government on asset sales and are likely to bid for the government’s stake in Bharat Petroleum Corp. Ltd, Mint reported citing two people aware of the matter. The privatization of BPCL is expected to attract global energy majors given that India is the world’s fastest-growing major oil market. The proceeds from the sale will also be crucial for the government to contain its fiscal deficit amid lower-than-expected goods and services tax collections and a corporate tax cut that will cost the exchequer ₹1.45 trillion. The Department of Investment and Public Asset Management (DIPAM) is in the process of hiring investment banker, legal adviser and asset valuer to execute the stake sale. The valuation report is expected to be submitted in 50 days. The companies are likely to bid for the government’s 53.3% stake in state-run BPCL either on their own or as part of a consortium. The government plans to meet at least a third of its ₹1.05 trillion disinvestment target by selling its stake in BPCL. A core group of secretaries on divestment approved the privatization of BPCL on 30 September. Technical bids by potential advisers, legal advisers and valuers for the privatization move are scheduled to be opened on 4 November and presentations by the eligible bidders for acting as an adviser for the privatization of BPCL would be held within one week of that. Financial bids of the shortlisted bidders will be opened shortly.
Infrastructure focused Sadbhav to merge its listed EPC and BOT businesses
Infrastructure focused Sadbhav group is merging its two listed entities Sadbhav Engineering Ltd, the flagship EPC services business and its listed subsidiary Sadbhav Infrastructure Projects Ltd, which builds and owns roads, ending the latter's short four year stint as an independently listed company, Mint reported. Sadbhav Infrastructure went public in September 2015, selling its shares at ₹103 apiece to investors in ₹425 crore initial public offering. Shares of Sadbhav Infrastructure closed at ₹44.2 apiece, down 1.12% on the BSE, while shares of Sadbhav Engineering closed at ₹138.85, up 0.54%. Sadbhav Infrastructure's market capitalization stood at ₹1,556 crore as on Friday, while Sadbhav Engineering had a market capitalization of ₹2,382 crore. According to a filing on late Saturday evening, Sadbhav Engineering told exchanges that shareholders of Sadbhav Infrastructure will get one share each in Sadbhav Engineering for three shares that they hold in the subsidiary company. In August, the board of Sadbhav Infrastructure had given an in-principle approval to consider a merger with its parent and to appoint intermediaries to advise in the same. The proposed merger aims to create a simplified corporate structure and better utilization of resources of the two group companies. Further amalgamation will result in direct shareholding by all the shareholders in the combined business leading to larger and diversified shareholder base, better trading and liquidity position in the equity shares, relatively higher market capitalization.
Blackstone crosses $12 billion investment milestone in India
Blackstone Group LP has invested $3.6 billion as of end-September in India, its record for a single year in the country, Mint reported citing a person directly familiar with the development. With this, total investments by the New York-based firm across private equity (PE) and real estate deals have crossed $12.6 billion. Blackstone aims to surpass the $13 billion mark by December 2019, which will also mark its 13th year of operations in India. Blackstone made real estate investments of $6.6 billion as of end-September, surpassing private equity funding at $6 billion. There are multiple deals in the pipeline, both in PE and real estate, and it will easily cross $13 billion by the end of this year. In real estate, Blackstone has mainly focused on commercial real estate deals, which comprises nearly $5.2 billion of the total investments. This year alone, it has invested around $1.6 billion in real estate, the largest transaction being the acquisition of the remaining stake in Indiabulls Real Estate Ltd’s (IBREL) commercial real estate portfolio and taking full control for over ₹4,000 crore. On the private equity front, Blackstone invested around $2 billion this year across sectors such as education, fashion, packaging and housing finance. It bought a majority stake in Aadhar Housing Finance Ltd and acquired a stake in companies such as Aakash Educational Services, Essel Propack Ltd, and Future Lifestyle Fashion.
NBFCs Bond with World, Muthoot Fin Eyes $450m
Gold loan company Muthoot Finance is set to raise about $450 million in its maiden bond sale in the overseas market, reinforcing the fact that capital-starved non-banking finance companies (NBFC) are increasingly tapping global investors, The Economic Times reported citing three people with direct knowledge of the matter. The bonds will be sold to global investors including those from the US, what is known as 144A in market parlance. The papers will mature in three years. Muthoot Finance plans to use the proceeds for both refinancing and other business purposes. The issuance may open for subscription this week. Investment bankers have already conducted global roadshows in places like New York, London, Singapore, Los Angeles to galvanise investor response. The company has appointed Deutsche Bank and Standard Chartered Bank for the proposed issuance as those banks are helping them to raise the money. The initial price guidance is not yet fixed by the investment bankers. The firm reported 8% rise in its net profit at ₹530 crore in the April-June quarter this year. During the period, the group expanded its loans nearly 6% year-on-year to ₹40,602 crore. Investors, many of whom are seen shying away from NBFCs, are attracted by Muthoot Finance as its loans are backed by good collaterals. The proposed bond sale is part of the company’s medium-term note (MTN) programme. Fitch Ratings has assigned a ‘BB+’ rating to Muthoot Finance’s $2 billion MTN programme with a stable outlook.
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