Affinity Equity Partners Sells Jaya Stake

Affinity Equity Partners has sold its majority stake in Singapore-based Jaya Holdings Limited to a Deutsche Bank-led consortium, Reuters reported. The consortium paid 202.6 million Singapore dollars ($158 million) for the troubled shipping company, Reuters said. Affinity acquired its stake in Jaya in 2006.

(Reuters) – Affinity Equity Partners has sold its majority stake in Singapore’s troubled shipping firm Jaya for S$202.6 million ($158 million) to a Deutsche Bank-led consortium, a unit of Deutsche Bank said.

The announcement comes sources told Reuters on Wednesday that private equity firm Affinity was close to a deal on the stake sale of Jaya Holdings Limited.

The sale marks the end of a protracted struggle for Affinity to exit the business, which never recovered from the economic downturn sparked in late 2008.

Affinity had acquired its stake in Jaya in 2006 through a vehicle called Nautical Offshore Services at the height of the credit boom.

The firm has been trying to offload its stake in Jaya, which builds and operates ships, since early 2010 when it hired Credit Suisse Group AG as sellside advisor.

Jaya was not making enough money to service a $233 million loan which Affinity used to acquire the shares.

The consortium’s acquisition of Affinity’s majority 54.7 percent stake will trigger a mandatory offer for the rest of Jaya, but the offer price of S$0.48 is a 27.3 percent discount to the last traded price of S$0.66 on Friday.

Jaya’s shares, which has fallen by 10 percent this year, rose 0.8 percent on Friday, outperforming the Singapore Straits Times Index’s 0.8 percent fall.

Deutsche has taken a 20.55 percent stake through its unit Cathay Asset Management (CAM), a vehicle that the German lender uses to invest in distressed companies.

“We and our consortium partners are looking forward to Jaya Holdings continuing its existing business,” Stephen Le, director of Cathay Asset Management, said in a statement late on Saturday.

“We believe Jaya Holdings is well-positioned in the current global offshore oil exploration and production environment.”

Other than Deutsche Bank, the rest of the consortium include Linden Capital, Orchard Capital and Octavian Advisors.

Linden has purchased 18.98 percent of Jaya, while two funds of Orchard Capital have acquired 10.11 percent, and two funds of Octavian Advisors have taken 5.06 percent. (US$ = S$1.28) (By Stephen Aldred; Editing by Lee Chyen Yee and Miral Fahmy)