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Kuwait’s NBK Capital exiting 40 percent stake in Saudi firm
Exits 40 pct stake in Saudi firm Hanco; Eyes IPO of Kilic Deniz in Turkey, hired Is Invest; Plans new fund targeting $300-350 mln
January 15, 2012 2:49 by Reuters
NBK Capital, the investment banking arm of National Bank of Kuwait, is selling its stake in Saudi fleet leasing and car rental firm Hanco and may cash out in an initial public offering for its Turkish investment Kilic Deniz, a top executive said on Sunday.
NBK Capital’s investment banking unit, which holds assets via its private equity and asset management businesses, is offloading its 40-percent stake in Hanco to existing shareholders in a deal which values the entire company at $140 million, Amjad Ahmad, senior managing director for alternative investments at NBK Capital, said.
Ahmad did not give a precise value for the deal, but a 40 percent stake would amount to $56 million based on current valuations.
“We more than doubled the fleet size when we entered the company,” Ahmad told Reuters in an interview in Dubai.
“We provide growth capital for companies… Usually we hold companies anywhere between two to four years. It was just that time. We grew the company substantially and we wanted to provide liquidity to our investors.”
Hanco was set up in 1976 and is one of the kingdom’s largest fleet leasing and rental firms.
HSBC advised NBK Capital on the deal, the executive said.
The firm, which is eyeing an exit of two more of its investments this year, is planning to dispose a portion of its 20-percent stake in Turkish food and beverage company Kilic Deniz in a public offering. It plans to hold on to a portion of the stake after any offering.
“Depending on market conditions, we’re looking to IPO Kilic Deniz. We’ve already hired an adviser and will be embarking on this IPO some time in 2012,” Ahmad said.
NBK capital also invested $50 million in Kilic through a mezzanine transaction. It has hired Is Invest, the investment banking arm of Is Bank, for the process.
The company is also in the process of marketing its second private equity fund to investors and is planning to raise $300 million to $350 million from the process.
The move comes even as regional private equity players find it increasingly difficult to raise funds.
“Our fundraising for our next private equity fund will start in the next month or so,” Ahmad said. “We’re targeting $300 to 350 million.”
It currently manages the $250 million NBK Capital Equity Partners Fund I and the Kuwait Investment Opportunities Fund.
NBK also runs a Mezzanine fund which invests in buyouts, acquisitions, growth financing, and recapitalizations. Overall assets at its alternative investments group stood at $550 million, Ahmad said.
NBK Capital’s portfolio includes companies such as Kuwaiti healthcare group Taiba Hospital and UAE-based Metito Utilities Ltd. (Reporting by Martina Fuchs and Dinesh Nair; Editing by Reed Stevenson)