Hinduja weighing sale of Saudi venture - sources

DUBAI Tue Nov 27, 2012 7:18pm IST

Related Topics

Stocks

   

DUBAI (Reuters) - A unit of Indian conglomerate Hinduja Group has hired Deutsche Bank (DBKGn.DE) to consider options for a 49 percent stake in a Saudi lubricants venture valued at up to $700 million, three sources said.

Jeddah-based Petromin is a joint venture between Gulf Oil International Group - a unit of family-owned Hinduja, and Saudi group Dabbagh with a 51 percent stake.

The partners have had differences over strategy, prompting Hinduja to hire an advisor and consider its options, the sources said on Tuesday, speaking on condition of anonymity as the matter has not been publicly disclosed.

A Hinduja spokesman in Mumbai declined to comment, as did Deutsche Bank. Petromin was not available to comment.

Any deal will most likely involve a third party buying out the Indian partner, one of the sources said, adding the business had an equity value of $600-$700 million.

"The business is good and it generates profit of around $200 million annually. The best option will be for a Saudi-based investor to come in and buy out the Indian group," one banking source said.

Petromin, the oldest lubricant company in the Middle East and formed by royal decree in 1968, makes more than 150 lubricant products and exports to over 35 countries in the Middle East, Africa and Asia, according to its website.

Dabbagh Group and Gulf Oil International Group paid $200 million to buy Petromin in 2007 from a joint venture between Saudi Aramco and Mobil Investments, an ExxonMobil (XOM.N) affiliate.

In 2010, Hinduja said it was planning a $1 billion initial public offering for Petromin and had hired Saudi British Bank 1060.SE to run the process. Hinduja said at the time Petromin had production capacity of 300,000 metric tonnes for lubricants and greases combined. The IPO did not go ahead.

Hinduja's India-listed arm, Gulf Oil (GFCL.NS), bought U.S. specialty chemicals company Houghton International HGINL.UL from a private equity fund for $1.05 billion earlier this month.

The Hinduja Group, which has interests across banking, media, power and automobiles in India, has a sizeable presence in the Gulf including Hinduja Bank in Dubai. (Editing by Dan Lalor)

FILED UNDER:

Economic Pulse

REUTERS SHOWCASE

Nifty Above 8,600

Nifty Above 8,600

Nifty hits record high above 8,600; state-run lenders gain  Full Article 

Indian in Iraq

Indian in Iraq

India says no contact with 39 men held by Islamic State in Iraq.  Full Article 

Sahara Issue

Sahara Issue

Sahara looks to raise $650 million loan to fund bail.  Full Article 

Bhopal Tragedy

Bhopal Tragedy

Bhopal's toxic legacy lives on, 30 years after industrial disaster.  Full Article 

Essar Group

Essar Group

Exclusive - Essar's planned oil-for-steel deal tests Iran sanctions  Full Article 

Islamic Fund

Islamic Fund

India gets new Islamic equity fund but debt market still off-limits  Full Article 

Fiscal Deficit

Fiscal Deficit

April-October fiscal deficit nears 90 pct of full-year target  Full Article 

Oil Prices

Oil Prices

Oil hits new four-year low post OPEC as glut looms  Full Article 

Gold Imports

Gold Imports

India eases gold import rule in surprise move.  Full Article 

Reuters India Mobile

Reuters India Mobile

Get the latest news on the go. Visit Reuters India on your mobile device  Full Coverage