Affinity Equity Partners is in advanced discussions with buyers for its stake in Singapore-based shipping company Jaya Holdings, Reuters reported. A consortium led by Jaya CEO Chan Mun Lye was among suitors for Affinity’s 54.7% stake in the company, which has a market capitalization of $412 million, Reuters wrote. Affinity bought its stake in Jaya Holdings in 2006.
(Reuters) – Buyers are in advanced discussions to purchase Affinity Equity Partners’ stake in struggling Singapore shipping company Jaya Holdings Ltd , according to sources involved in the matter, after Affinity struck a deal with a majority of its bank lenders.
The sources said a consortium led by Jaya CEO Chan Mun Lye was among suitors in talks to purchase Affinity’s 54.7 percent stake in the company, which has a market capitalisation of $412 million. Chan did not return message seeking comment.
A sale by Affinity would mark the end of a protracted struggle to exit the business, which never recovered from the economic downturn sparked in late 2008.
Sources said the company and its private equity investor hoped to have a definitive agreement shortly after its quarterly results, due out on Feb. 11.
On Jan. 27, Affinity’s shares were placed in receivership, according to sources, with Borrelli Walsh acting as receiver. Borrelli Walsh declined to comment.
Affinity has tried to offload its stake in Jaya, which builds and operates ships, since early 2010. The company was not generating enough money to service the $233 million loan the private equity firm borrowed to buy the shares.
Credit Suisse Group AG was hired as the sellside advisor, but with markets still bearish on the shipping sector few bids came in and the final deal would not be enough to fully repay bank lenders, according to sources familiar with the matter.
Thirteen lenders were involved, the sources said, adding that while most appeared willing to take a loss on the loans, some banks were still holding out to be paid in full.
Indicative pricing on Nautical’s debt in the secondary market is 60 to 65 cents on the dollar.
The lenders could receive 70 to 75 percent of their money back, according to a source familiar with the matter.
The company and Affinity were working on a deal to finally appease all lenders, the sources said.
Bank of America Corp Merrill Lynch, Mizuho Financial Group Inc and Singapore’s United Overseas Bank Ltd were lead arrangers of the original loan. The banks declined to comment.
Affinity also declined to comment. Jaya was not immediately available for comment.
Affinity bought its stake in Jaya Holdings in 2006 through a vehicle called Nautical Offshore Services at the height of the credit boom. (Editing by Michael Flaherty and Chris Lewis)