Sical Logistics signs agreement to raise US$26 million from Old Lane

Sical Logistics Ltd on September 05, 2007 has announced that Old Lane Mauritius IV Ltd, an investment vehicle of Old Lane India Opportunities Funds ("Old Lane") has agreed to invest USD 26 mn in its newly formed subsidiary, Sical Infra Assets Ltd. The investment by Old Lane in Sical Infra Assets will help to fund the growing infrastructure business of the Company.

Sical Infra Assets was formed to house the Company's asset-heavy, capital-intensive, longer gestation infrastructure based businesses like the Multimodal logistics hubs at Nagpur, Sical Iron Ore Terminal at Ennore, Container Rail Project, the Container terminals along with PSA Singapore at Tuticorin and Chennai as well as Sical Distriparks. The decision to segregate the short cycle service oriented businesses from the longer duration BOT type assets was to crystallize the value of investments made by Sical into its SPVs. The approval to dilute the equity holding of Sical Infra Assets was obtained from the Board on August 02, 2007.

Sical Chairman Ashwin C Muthiah said, "We appreciate this opportunity to associate with Old Lane as a equity partner in Sical Infra Assets. Old Lane shares our vision to build world-class infrastructure, for delivery of seamless integrated multimodal logistics solutions to our customers. I am confident that the existent services business and the asset heavy infrastructure business will feed off each other and provide efficiency to the infrastructure business as well as quantum growth in value / volume to Sical's services business."

Both, the movement of assets from Sical Logistics to Sical Infra Assets and the flow of investment of USD 26 mn from Old Lane, are expected to be complete by February 2008.

Sical has submitted the application to the Foreign Institutional Promotion Board (FIPB) and the investment will be accepted, subject to all regulatory approvals.

Source : Equity Bulls

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