Report: Affinity to exit struggling shipping asset

The firm has reportedly hired Credit Suisse to advise on the sale of Singapore shipping company Jaya Holdings to a consortium led by the company CEO.

Affinity Equity Partners is reportedly in advance negotiations to sell its stake in Singaporean shipping company Jaya Holdings to a consortium led by the company’s chief executive officer Chan Mun Lye, according to a Reuters report.

Affinity, which has reportedly hired Credit Suisse to advise on the transaction, acquired a 54.7 percent stake in Jaya for $47 million in 2006 via Nautical Offshore Services, a Cayman Islands subsidiary of the firm.

According to Reuters, the company was severely hit by the ensuing economic downturn and has been unable to generate enough money to pay off the $233 million debt it incurred at the time of Affinity's buy-in. Affinity has been trying to sell its holdings in the company since early 2010, the report noted.

Citing anonymous sources, Reuters added that thirteen lenders were involved in the debt and that currently Affinity was working with these creditors to try to find a solution that was palatable to all.

Financial details pertaining to the deal are unclear, although the company reportedly has a market capitalisation of $412 million. An Affinity spokesperson told PE Asia that for the moment “there is no definitive deal on the table with any party”, and declined to elaborate further.

The pan-Asian investor this week took part in what local media reports are predicting will be New Zealand’s largest deal this year when it acquired a stake in poultry company Tegel’s for around NZ$605 million ($466.5million; €342.1million).

Tegel's sellers are a consortium consisting of Australian private equity firm Pacific Equity Partners, ANZ Capital and UK mezzanine firm Intermediate Capital Group (ICG).