Blackstone invests $23 million in Allcargo

The Blackstone Group, the global private equity giant, today said that it had pumped in an additional $23 million (around Rs 110 crore) into Allcargo Global Logistics.

The Allcargo board approved an investment of 1.5 million warrants of Rs 10 each, convertible into equal number of equity shares of the company, at a price of at least Rs 934 per equity share by The Blackstone Group and its affiliates, the company said in a statement. With the latest investment, Blackstone’s total commitment to the company would increase to $75 million. It would continue to have representation on the Allcargo board. Akhil Gupta, chairman and managing director of Blackstone Advisors India, is a director on the company’s board.

In recent months, the private equity fund that has investments in companies such as Nagarjuna Construction and garment manufacturer Gokuldas Exports has been scouting for investments but had not announced fresh stake acquisition. The company — which has interest in container freight station, equipment hire, project logistics and warehousing — reported a net profit of Rs 22.53 crore on an income Rs 116.42 for the second quarter ended June. The warrants allotted to Blackstone GPV Capital Partners (Mauritius) V-K, Blackstone GPV Capital Partners (Mauritius) V-L, Blackstone GPV Capital Partners (Mauritius) V-M and Blackstone GPV Capital Partners (Mauritius) V-Non preferential basis were due for conversion at an exercise price of Rs 1,284 per equity share, by September 26, 2009, Allcargo said.

But the warrant holders decided to convert the warrants at a 27.26 per cent discount to the original exercise price. The logistics company’s shares closed 1.23 per cent higher at Rs 836.45 on the Bombay Stock Exchange.

“The board of directors of the company considered the prevailing market conditions, the economic slowdown and the funding requirement of the company, approved and accepted the revised exercise price,” the communiqué said.

To seek shareholders approval for amendments to the investment agreement and also to amend the articles of association, Allcargo had convened an extraordinary general meeting on October 15, it added.