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Wed 10 Mar 2010 08:39 PM

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Dubai's Istithmar kicks off ISS auction - bankers

Bank of America, Merrill Lynch and RBS have been appointed as sell side advisers.

Information memoranda have been issued for the sale of Istithmar's port and shipping agent Inchcape Shipping Services (ISS) as the auction gets underway, bankers close to the deal said on Wednesday.

Global marine management firm ISS is owned by Dubai investment group Istithmar, part of the heavily indebted Dubai World, which remains in restructuring talks with its lenders.

News of the sale emerged in February, following Dubai World's request for a $26 billion debt standstill in November and is expected to attract widespread attention as Dubai World finalises the details of a debt restructuring proposal.

Bank of America, Merrill Lynch and Royal Bank of Scotland have been appointed as sell side advisers and are working on a staple financing backing the sale, one of the sources said, which is attracting interest from private equity firms.

Dubai World and ISS both declined to comment.

Sources previously told Reuters that Istithmar was looking for a $700 million price tag for the sale.

Full year figures have not been released but ISS is expected to have generated earnings before interest, tax, depreciation and amortisation (EBITDA) of around $70 million in 2009, two of the bankers said.

The company has shown continued growth since posting EBITDA of $66 million in 2008, one of the bankers added.

Istithmar bought ISS for $285 million in 2006 from private equity firm Electra, backed by a $240.4 million loan arranged by Royal Bank of Scotland, according to Thomson Reuters LPC data.

Private equity firms including Advent International, Cinven, Montagu Private Equity, and TPG Capital are considering an offer, sources told Reuters, while the Financial Times reported that Charterhouse Capital Partners and Kohlberg Kravis Roberts were also working on potential bids. (Reuters)

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