Blackstone had acquired 75% of Essel Propack on 22 August, 2019, for $470 million at Rs134 per share, from erstwhile promoters - the Essel Group and public shareholders
Blackstone will continue to own 52% in Essel Propack going forward and will not go below this level
Mumbai: The world’s biggest alternative asset manager Blackstone on Friday sold a large chunk of shares, representing almost a quarter of the total shareholding, in packaging firm Essel Propack Ltd through block trades, to various institutional investors.
As per data available on stock exchanges, Epsilon Bidco Pte. Ltd, a Blackstone entity which owns 75% of Essel Propack, sold 72.58 million shares on friday at a price of around Rs256.5 apiece.
The trade fetched Blackstone approximately Rs1,861.5 crore or $252 million.
Mint reported on Thursday that Blackstone had set a floor price of Rs255 per share for the stake sale. UBS Securities India Pvt Ltd and Systematix Shares & Stocks advised Blackstone on the trade.
Shares of Essel Propack closed trading at Rs251.9 apiece, down 7.73% on the BSE.
The shares were bought by a clutch of institutional investors such as Axis MF, IDFC MF, Aditya Birla Sun Life MF, Nomura, Franklin Templeton MF, DSP MF, Government Pension Fund Global and Neuberger Berman
Earlier in June, Blackstone had sold a 8.7% stake in Embassy REIT worth around $300 million.
Blackstone had acquired 75% of Essel Propack on 22 August, 2019, for $470 million at Rs134 per share, from erstwhile promoters - the Essel Group and public shareholders.
“Within 13 months of investment, Blackstone has returned $252 million by selling 23% of the company’s shares at Rs256.5 per share. This implies a 106% IRR / 2.2x Multiple of Money in USD on Blackstone’s equity, net of debt at Holding company," a spokesperson for Blackstone said.
Blackstone will continue to own 52% in Essel Propack going forward and will not go below this level, the spokesperson said.
“The transaction was executed to create liquidity in the stock given significant investor interest after the company’s strong performance. Also, these 23% shares came in the Open Offer last year which now have been sold back to high quality global and domestic investors," the spokesperson added.
“Within our first year of ownership, Blackstone recruited a new CEO (Sudhanshu Vats, over 20 years at Unilever, 8 years at Viacom18), CFO (Parag Shah, 7 years at Medtronic, 14 years at Unilever), a fit-for-purpose Lead Director (Uwe Roehrhoff, ex-CEO of former Blackstone portfolio company, Gerresheimer Packaging) and Chairman (DS Brar, also Chairman of Mphasis, a Blackstone portfolio company). In addition, Blackstone launched a productivity improvement program that helped deliver 170 bps of margin expansion and 400 bps of ROCE improvement."