Private equity backed VA Tech Wabag Ltd is forming a joint venture with Oman-based business group Zawawi Trading Company LLC (ZTC) to tap into the operation and maintenance business in the water space in the Middle Eastern nation. VA Tech Wabag will own a majority stake in the 70:30 venture that would target contracts for water and waste water treatment plants, sewerage and water networks and pumping stations.
The company already has its operations spread across the Middle East, North Africa, Central and Eastern Europe, China and South East Asia besides India through principal offices in India, Austria, Czech Republic, China, Switzerland, Algeria, Romania, Tunisia, UAE, Libya and Macao.
The company leverages the well recognised Austrian brand name Wabag internationally in the field of water and water treatment solutions. It has been focusing on spreading its operations in emerging markets and was looking to strike local partnerships for the same.
VA Tech competes with the likes of Veolia Water India, Degremont India, Hindustan Dorr Oliver and L&T in the municipal sector and companies like Thermax, Ion Exchange, EIL, Hindustan Construction, Nagarjuna Constructions, Gammon India and Driplex in the industrial sector.
The firm is backed by a slew of financial investors including ICICI Ventures, GLG Emerging Markets Fund, Sattva India Opportunities Co and Passport India Investments. ICICI Ventures had invested a total of about Rs 55 crore to support one of the rare management buyouts in India from the company’s Austrian parent VA Tech WABAG GmbH in August 2006.
VA Tech Wabag, whose four promoters include British national Rajiv Mittal, Amit Sengupta, Shiv Narayan Saraf and S Varadarajan, raised around Rs 125 crore through fresh issue of shares late last year. Financial investors made Rs 353 crore with ICICI Ventures itself getting Rs 134 crore through shares offered for sale.
ICICI Ventures had been on an exit mode from its investment in the engineering services company. Last week it sold 10% out of its remaining 14.6% (held through two funds) in the company earning Rs 162.6 crore with 7.5x gross returns.