Hindujas close to selling lubricant firm

Last Updated: Tue, Apr 09, 2013 11:53 hrs

The Hinduja group is close to selling its stake in its Saudi joint venture Petromin, which is valued at close to $700 million.

According to a source close to the group, its partner Dabbagh group will buy the stake for around $350 million.

Jeddah-based Petromin is a joint venture between Gulf Oil International Group, a unit of family-owned Hinduja which owns a 49% stake, and Dabbagh with a majority 51% stake.

The group will use the proceeds of the transaction to pay off part of the $1.05 billion loan taken to buy US-based chemical firm Houghton International, the source said, asking not to be quoted.

Strategic differences over the business prompted Hinduja Group to hire Deutsche Bank last year to help review options, including a potential sale.

Dabbagh Group, which has interests in food, real estate and automobile services among others, is partly financing the purchase through debt and has decided not to engage another party in the venture for the time being, one of the sources said.

"It's pretty much a done deal now and they are waiting for some formal processes before signing it. Petromin is a profitable business and it makes sense for the Saudi family to keep it within the group," another source said.

Dabbagh Group and Gulf Oil International Group paid $200 million to buy Petromin in 2007 from a joint venture between Saudi Aramco and Mobil Investments, an ExxonMobil affiliate.

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