3i shelves plan to sell Franklin Offshore

Bids received for the Singapore-based mooring business fell below 3i's valuation of the company at $400m.

3i has cancelled a plan to sell a stake in deepwater mooring specialist Franklin Offshore, according to sources close to the matter.

3i, which valued the company at approximately $400 million, received bids, which valued the business at between $200 million and $300 million, a source said.

Private equity firms Actis Capital, CHAMP Private Equity, HSBC Private Equity and Singapore-based Halcyon Investment Corporation have been named in media reports as bidders for the stake.

3i, Actis Capital, HSBC Private Equity and Halcyon Investment Corporation declined to comment. CHAMP Private Equity could not be reached for comment at time of press.

“Franklin Offshore’s after-tax income in 2008 was S$50 million ($34 million; €25 million). So market valuations for the business are between 5x and 6x earnings, which mean price expectations for the company range between S$200 million and S$300 million,” the source said earlier this May.

3i’s decision to raise approximately £700 million ($1.6 billion; €812 million) via a rights issue in May relieved pressure on its balance sheet, so the firm had no need to sell the asset at this time, one source said.

3i invested an undisclosed sum into Franklin Offshore in July 2007, with a view to list the company on the Singapore Stock Exchange.