Private Equity(PE) firm Citigroup Venture Capital International (CVCI)
is picking up a 17.7% stake in Hyderabad-based
infrastructure company Coastal Projects for Rs 178 crore, a person with direct knowledge of the transaction told ET.
The investment would be routed through CVCI’s
Mauritius-based growth funds Client Ebene and Employee Rosehill.
Both the funds are registered with Sebi and part of their stake
acquisition would come in fresh shares, the person said, but refused to part
with more details like the ratio between existing and new shares that the Citi
funds would acquire.
CVCI’s funds would help Coastal Projects
to expand across the country and ramp up its work in several areas in
underground excavation, including hydro-electric projects, rail tunnels and
other road works.
It has executed several contracts both in private
and public sector. Coastal Projects, established in 1995, is currently on the
look out for power and other infrastructure projects in Sri Lanka and other
Asian countries.
The company operates from Hyderabad, Delhi,
Bangalore and Chennai in India and is looking at tapping other cities in the
next few years. It also has an office in Colombo.
Coastal Projects
earlier divested its stake to foreign investors FIL Capital (7.50%), Sequoia
Capital (6.25%) and Deutsche Bank (2.92%). With the induction of capital from
Citigroup-led funds, these private equity firms
would see a dip in their
holdings. FIL Capital’s stake would shrink to 7.2%, while Sequoia Capital
and Deutsche Bank would hold 6% and 2.8%, respectively.
CVCI is the
investment arm of Citigroup and some of its earlier big-ticket investments
include the ones in Jindal Drilling & Industries, Spentex Industries, SVIL
Mines and Sharekhan.
Client Ebene and Employee Rosehill together
hold 15% stake in Delhi-based civil engineering and industrial construction firm
Subhash Projects and Marketing.
CVCI stepped up investments in
India in 2005 after it launched the $1.7-billion Growth Partnership LP Fund I
— the first independent PE fund it raised since its inception as a PE
investor in 1996. Investments prior to 2005 were made mostly out of proprietary
funds from Citi.
Source: Economic Times