Blackstone loads up on Allcargo stock

The global buyout firm is converting 1.5m warrants into shares of Allcargo Global Logistics, bringing its total investment in the company to about $80m.

The Blackstone Group has made a follow-on investment of INR1.42 billion ($29.5 million; €20 million) in Allcargo Global Logistics, an Indian private sector logistics operator whose operations include container freight stations, inland container depots and less-than-container-load consolidation.

Blackstone already held a stake of 5.26 percent in the company, having first invested in Bombay Stock Exchange-listed Allcargo in February 2008.

As part of the latest transaction, the global buyout firm has converted about 1.5 million Allcargo warrants into equity shares in the company at a price of INR934, Allcargo said in a statement to the Bombay Stock Exchange. This marks a discount of 27 percent on the price agreed in the initial investment agreement, which gave warrant holders an option to convert at an exercise price of INR1,284 per share on or before 26 September 2009.

Allcargo’s board has approved and accepted the revised price in light of the prevailing market conditions, the economic slowdown and the funding requirements of the company, it said in its statement. The company has called for an extraordinary general meeting on 15 October to seek approval for amendments to the investment agreement.

Following this conversion, Blackstone’s total investment in the company will stand at about $80 million at today’s currency exchange rate. It has not been disclosed how big its stake in the company will be, although when the firm first invested in Allcargo, it said it intended to keep its stake in the company lower than 15 percent.

Some of Blackstone’s other portfolio companies in India include construction company Nagarjuna Construction, garment exporter Gokaldas Exports, precision components company MTAR Technologies, CMS Computers and Emcure Pharmaceuticals. In January, Blackstone invested between $50 million and $80 million in NSL Seeds, a Hyderabad-based hybrid seed company, for a stake of between 20 percent and 25 percent.