Vopak Indian JV on the brink of IPO debut
This morning during trading, Vopak issued a press release commenting on the IPO process of its Indian joint venture AVTL. The final prospectus was filed and the upper end of the price band is roughly in line with the attractive pricing of the private placement occurring last October. We applaud the important hurdle being taken. Upon completion of the IPO, expected sizeable cash proceeds (€288m – upper end of range – 100% JV) will fund AVTL's growth and free up cash at Vopak holding. The latter can then be deployed in other projects or used for additional cash returns. AVTL's valuation multiples will far exceed Vopak's current proportional EBITDA25E multiple of 7.3x further underpinning the appeal of the upcoming transaction. With an estimated 10% in additional shares to be created, control over AVTL will remain with the original JV partners. Bookbuilding should occur in the coming days with first trading expected in the weeks ahead. Buy rating reiterated.Royal Vopak is a holding company. Via its subsidiaries, Co. acts as a tank storage provider for the oil and chemical industry. Co. operates a network of terminals located at locations along trade routes. Co. also provides a range of additional services, from loading and unloading a range of transport modalities to heating, cooling, blending and customs formalities. The customers Co. serves range from global to local clients and include national and global producers, governments, distributors and traders of liquid and gaseous bulk products. Co.'s customers are active in the production, trading and marketing of oil products, chemicals, gases, biofuels, edible oils and liquefied natural gas.
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