Determined to bid for Dredging Corporation of India, which is being lined up by the Indian government for strategic sale as part of the disinvestment programme, Mercator is preparing to raise a credible war chest.
The private player plans to raise $300 million by selling its coal assets in Indonesia and Mozambique, and selling stake in its dredging division to leading private equity funds.
Also, Indian and Chinese players are in the fray to buy Mercator’s 50% stake in three East Kalimanthan coal assets in Indonesia and one asset in Mozambique, sources said.
“Mercator has decided to exit the coal business as it is no longer a core business to the group,“ sources said. “We expect the transaction to get concluded within the next two quarters,” sources added.
Mercator expects divestment to fetch Rs 1,200-1,500 crore. Nomura is helping the company sell coal assets, sources said. Mumbai-based investment bank Singhi Advisors is running a process for Mercator to raise funds for its dredging unit, sources said.
Sources said the diversified marine operator is in talks with Canadian billionaire Prem Watsa-promoted Fairfax Financial Holdings and US private equity giants KKR and Blackstone to make a joint bid for state-run Dredging Corporation of India, in which the government is looking to sell its entire 74% stake.
Dredging Corporation of India is India’s largest dredging company and the only public sector enterprise in the sector with a fleet of 19 dredgers.