INDIA BUSINESS WORLD - FEBRUARY 16th - FEBRUARY 29th - 2008
NRI BUSINESS TYCOON C SIVASANKARAN BUYS NORWEGIAN SHIPPING FIRM
NRI business tycoon C Sivasankaran, who sparked a corporate sensation in 2005 by selling his telecom business (Aircel) to Maxis of Malaysia for $800 million, has acquired Norwegian shipping firm JB Ugland Shipping (JBUS) for about $300 million (Rs 1,200 crore).
Mr. Sivasankaran routed the acquisition through his flagship company Siva Ventures, which controls one of the leading domestic telecom firms, Sterling Infotech. The $2-billion Siva Ventures straddles sectors as diverse as media, biofuels, wind energy and real estate.
Mr. Sivasankaran confirmed the deal and said “Demand from India for shipping bulk commodities is likely to see explosive growth on the back of increased raw material demand from power and oil refining projects coming up in the country, a large number of which are based on imported raw materials.”
A profit-making company, JBUS is expected to close the current year with revenues of about $150 million, Siva Ventures group chief executive officer V Srinivasan said.
Sources said the incumbent management of JBUS, led by its CEO Bjorn Bergsland, will continue to manage the company. As part of the deal, the company has the rights to use the JBUS brand name for three years. It will continue trading under the JB Ugland name.
A statement issued by Sterling Infotech said the transaction was agreed upon last month and closed on February 15. Standard Chartered Bank advised Siva Ventures while JBUS was advised by Pareto, a leading Norwegian investment bank.
Mr. Srinivasan said shipping is a new growth sector identified by the group. “The acquisition is a part of the strategy,” he said.
JBUS has a fleet of 40 owned and long-time chartered vessels with an aggregate capacity of nearly 2 million deadweight tonnage (DWT).
The company’s fleet consists of a mix of tankers, chemical carriers and bulk carriers. The fleet, with an average life of four years, includes operational vessels and a new building programme to be delivered in phases over the next three years. The company’s main operations are centred in Oslo and Singapore. “I believe the shipping industry, especially the bulk segment—both tankers and dry bulk carriers—will increasingly revolve around the broader Asian commodities story,” said Mr. Sivasankaran.
JBUH chairman Johan Benad Ugland expressed pride at having developed a company that has attracted interest from a global player. “Along with China, we believe India will be one of the main growth engines of the overall world economy. And it will be important for Norwegian companies to further strengthen business relationships with Indian companies,” he said.
|
