Blackstone’s Rs 300-cr push for Gateway Rail

Font Size

Print

Feedback

Email

Discuss

Related Articles

Bejan Daruwalla bequeaths his stellar legacy to Ga...ArcelorMittal short-lists sites in KarnatakaTCS announces new doctorate funding programKPMG adjudged India’s indirect tax firm of the yea...

New Delhi: Signalling a revival of private equity investment in the country, US-based Blackstone Group on Monday announced a Rs 300 crore investment in logistics company Gateway Rail through compulsory convertible bonds. Blackstone picked 37.5% stake in the logistics firm.

The Rs 300-crore Gateway Rail is a subsidiary of Gateway Distriparks and is currently the largest private container train and ICD operator after state-owned Concor and owns and operates from three terminals. “We have been growing at 50% annually until now. We are hoping to touch Rs 1,000 crore in the next five years after which we plan to go public,” Prem Kishan Gupta, chairman and managing director, GatewayRail, told FE.

In case the company is unable to meet the set Ebitda targets spread over five years, Blackstone may acquire up to 49.9% using the convertible bonds. Gateway Rail had a debt equity ratio of 1:1, but with this deal it has now fallen to less than 1, Gupta said. After the deal, enterprise valuation of the firm is Rs 805 crore. The logistics firm will use the infused capital to invest in new terminals, trains and increase capacities.

“Until now, we have invested around Rs 600 crore and plan to use the Rs 300 crore along with our internal accruals to reach an investment of Rs 750 crore”, Gupta said.

“Apart from growing on our own, we are also actively looking for potential targets,” he added. With this deal, Blackstone has invested in nine businesses and this is the company’s second investment in the logistics sector. The company had earlier invested Rs 85 crore in another logistics company, All Cargo.

Commenting on the recovery of private equity investment in the country, Akhil Gupta, chairman and managing director, Blackstone Advisors India, said things had begun to improve . “We are negotiating at a couple of places, and hopefully deals would materialise”.

Speaking on Blackstone’s investments, Gupta said last November onwards, there was a deliberate attempt to go slow until the general elections. “We wanted to be sure of the election results, and see what sort of government was formed,” he said.

He said despite the stock markets tanking, there were no companies up for sale.