The Hindu Business Line : Blackstone picks up 10.38% stake in Allcargo Global

The deal
Blackstone is also being issued 10,81,081 fully and compulsorily convertible debentures (FCCD) with a coupon tag of 6 per cent.
These FCCDs are equally convertible into shares after 18 months from the date of issuance, also at a price of Rs 934 each.

Our Bureau

Kolkata, Feb. 20 Private equity firm Blackstone is buying 10.38 per cent stake in Allcargo Global Logistics (AGL) in a multi-layered structured deal and intends to pick up another 4.61 per cent of the enhanced paid up equity from the market.

The deal entails, among other instruments, issue of 1,000 equity shares of Rs 10 each at a price of Rs 934 per share, representing a premium of 30 per cent over Tuesday’s closing market price of the stock. After the recent upheaval over pricing of equity issues, this marks a significant premium in a placement price. The investment-banking arms of Kotak Mahindra Capital, CitiGroup and Collins Stewart Inga were the joint advisors to the deal.

Blackstone is also being issued 10,81,081 fully and compulsorily convertible debentures (FCCD) with a coupon tag of 6 per cent.

These FCCDs are equally convertible into shares after 18 months from the date of issuance, also at a price of Rs 934 each.

AGL is also issuing 15,13,514 warrants, equally convertible within 18 months at a price, linked to the consolidated EBIDTA during 2008, ranging between Rs 934 and Rs 1,284 per warrant. The AGL board approved the deal on Tuesday.

Conversion price

As per the terms, if the AGL EBIDTA in financial year to December 31, 2008, remains within Rs 190 crore, then the conversion price would be Rs 934 per share. “For an EBIDTA of over Rs 190 crore and within Rs 200 crore, the price would be Rs 1,109 per share. For two other stages — up to Rs 210 crore and upwards — the respective prices for a share would be Rs 1,209 and 1,284,” Mr Shashi Kiran Shetty, the Chief Managing Director of AGL, told Business Line.

He said the funds would be used for ICD/CFS expansion and the cranes business in the domestic market as also for its proposed project in Dubai.

The company’s current paid up capital is Rs 20.26 crore and the consolidated EBIDTA is Rs 120.74 crore. The deal would fetch a total of Rs 242.4 crore, out of which upfront subscription would be Rs 130.42 crore. On subscription, Blackstone will pay Rs 194 per warrant.

Blackstone is the second private equity investor in Allcargo. New Vernon Private Equity had picked up 5.4 per cent in a pre-IPO placement in AGL.

Allcargo is a multi-modal transport solutions provider and operates a number of CFSs and also handles project cargo besides providing airfreight and road transport logistics services.

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