Global Capital Management, a wholly-owned subsidiary of Kuwaiti investment bank Global Investment House (GIH), has sold its stake in Indian refinery Reliance Petroleum.
The firm has been liquidating its position in tranches and has achieved an internal rate of return (IRR) of more than 70 percent on the transaction and a multiple of 1.84x, Shailesh Dash, managing partner of Global Capital Management, said in a statement.
A subsidiary of Indian conglomerate Reliance Industries, Reliance Petroleum has a refinery and petrochemical complex in a Special Economic Zone in Gujarat. It is currently setting up a greenfield petroleum refinery and polypropylene plant at the same location. The project is estimated to cost INR270 billion ($5.4 billion; €4.1 billion).
Global Capital Management made its investment from the $1 billion Global Opportunistic Fund II, which is focused on the Middle East and North Africa region as well India, China, Pakistan and Turkey. The fund targets listed and private companies with enterprise values in excess of $100 million.
Currently, the fund is fully invested across 10 assets, four of which have been exited generating IRRs of between 40 percent and 350 percent. More than 30 percent of the fund is invested outside the MENA region.
This March, GIH reshuffled its management team and streamlined reporting lines in a bid to reduce its debt burden following its default on a $200 million loan in December 2008.
In January 2009, GIH acquired a majority stake in Kuwaiti logistics company Jassim Transport & Stevedoring. Six months earlier, it acquired another majority stake in Al Sawani, a Saudi retail chain.
Global Capital Management presently manages more than $3.2 billion in assets and has offices in Kuwait, Saudi Arabia, Egypt and Turkey.