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Eredene Capital sells 10% Sattva CFS stake to Sattva Business Group - 2012-01-31

Eredene Capital has sold 10 per cent of its stake in Sattva CFS & Logistics Pvt Ltd for £1.1million (about Rs 8 crore) to the Chennai-based Sattva Business Group, which is the promoter of the container freight station (CFS). The partial sale was the first disposal since the UK-based investor Eredene Group began building a portfolio of infrastructure investments in India in 2007. The Eredene Group subsidiary originally invested £880,000 for 49 per cent of Sattva CFS with the Sattva Business Group holding 51 per cent. Post the stake sale, Sattva Business will hold holding to 62 per cent, according to Eredene. The sale represents a return multiple on the investment of 5.9 times and an internal rate of return of 49 per cent for Eredene Capital, which invests in India's infrastructure projects. Sattva CFS, located in Vichoor and servicing the Chennai port, was Eredene Group's first investment in the sector in 2007. The business developed from a green field site to become dividend paying within two years. It has been consistently profitable and dividend paying since 2009. The sale implies a total valuation for Sattva CFS of Rs 85 crore (£10.9m), slightly below the directors' valuation of Rs 91 crore (£12.0m) as on September 30, 2011 but well in excess of the investment cost valuation of Rs 14 crore (£1.8m). The Eredene Group has a second CFS investment with the Sattva Business Group, Sattva Conware Pvt Ltd near Ennore, in which it has an 83 per cent stake. The Eredene Group has made investments of £44.6m in eleven projects in India - nine in ports and port services, logistics and distribution warehouses, one in an IT office and one in a large-scale, affordable housing development. Six of its investee companies are revenue generating, of which two are dividend paying, the group said.

Source: Hindu Business Line