It seems as though something is afoot!!!! Maybe wiser heads may decipher this. I do know something is up though..





Blow for Dubai World over Inchcape sale

By Martin Arnold in London and Simeon Kerr in Dubai

Published: June 17 2010 17:15 | Last updated: June 17 2010 17:15

Dubai’s sale of a flagship corporate asset has been dealt a blow after prospective bidders learnt of an investigation they believe the US Department of Justice is conducting into the business.

Dubai World has been seeking to sell Inchcape Shipping Services, a port and shipping agent, as the state-owned conglomerate seeks to raise cash as part of a restructuring of its $23.5bn of debts.
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However, several private equity groups dropped out of the bidding for the business after discovering during due diligence what they believe is an investigation by the DoJ over its contract to service the US navy’s Fifth Fleet in the Middle East.

US private equity groups General Atlantic and Carlyle and Canadian pension fund Omers all decided not to submit second-round bids, said people familiar the matter.

Cinven and CVC Capital Partners, the UK-based private equity groups, submitted non-binding bids late last month. But the bids were conditional on receiving more information about what they believe is a US probe and the two groups have stopped work on a deal.

The private equity groups believe the DoJ is investigating the government services division of ISS along with some of its rivals, said two people familiar with the company.

One of the people said the private equity groups had learnt that investigation had been ongoing for several months and was triggered by information from one of ISS’s competitors about alleged corruption.

ISS is one of the few successful investments in Dubai World’s Istithmar investment portfolio which includes the QE2 ocean liner and performance company Cirque du Soleil. Istithmar bought ISS for $285m at the start of its buying spree between 2006 and 2008.

It has put the company up for sale with an $800m pricetag as part of a sell-off of many of the assets it snapped up during the credit bubble as Dubai World seeks to restructure its $23.5bn debts.

Fears of a US probe are likely to reduce the price bidders are willing to pay for ISS. One person familiar with the bidders warned the auction, which is being run by Bank of America Merrill Lynch, could collapse.

Another person familiar with the sale said the deal could be postponed because Dubai World had concerns that it would obtain fair value for the asset. All parties declined to comment.

ISS, based in Chafford Hundred, east of London, describes itself as the world’s biggest independent marine management company. It services the US and British navies in the Gulf and manages oil tanker contracts with ExxonMobil and Shell.

It has more than 200 offices in 63 countries, and it made $502m of revenue and $62m of operating profit last year. In 2005, it won a $50m five-year contract to provide husbanding services – providing fuel, food and other essentials – to the Fifth Fleet, the Bahrain-based US naval operations that span the Middle East and Indian Ocean.

The company’s Bahrain operation won another contract for the US Naval Supply Systems Command as recently as February.

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Kathyet