Mercator plans $150-m IPO of Singapore arm

Mercator Lines, one of the largest shipping lines in India, is planning a $150 million (R680 crore) initial public offering (IPO) of its Singapore-based coal exploration and mining unit,

Oorja Holdings, by the end of 2011. The company will divest not more than 30% stake in Oorja and the listing will be done either in Singapore or London.
When contacted, HK Mittal, chairman, Mercator Lines, declined to comment while Atul Agarwal, the company’s managing director, could not be reached. The company's shares closed at R40, up 0.76% on Thursday on the BSE.
“We will be listing Oorja mainly to raise funds for expansion and retire debt of about R450 crore of our total consolidated debt of R3,200 crore,” said a company official requesting anonymity.
He added that the company was in the process of appointing bankers to the issue. Incorporated in 1983, Mercator's interests are diversified ranging from shipping, coal, dredging and offshore oil and gas services.
Coal mining and trading activities contributed about 49% or R1,388 crore to the total revenue for 2010-11. “For the second consecutive year, the coal business posted a handsome growth in revenue of over 250% this year and in Ebitda over 900%. This tempo of growth is expected to continue,” the company noted after the March 2011 quarter announcement. In the year to March 2011, the company reported consolidated revenues of R 2,806 crore and a consolidated net profit of R46.85 crore.
“Focus has shifted to coal and coal handling so as to balance the cyclical nature of shipping. Mercator Lines currently operates two mines in Indonesia and has bought the third mine there which will be operational this October. Compared to the traditional shipping business, the coal business is growing faster,” said Bharat Chhoda, analyst with ICICI Securities.
As of March 31, 2011, about 40.22% of the equity was held by promoters and remaining 59.78% was held by the public. The company has about six subsidiaries operating in Singapore, and of them, Mercator Lines Singapore was listed on Singapore Exchange in 2007.
Source : The Financial Express