Private Equity Billionaire Wins Approval For Navigator Holdings Takeover

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September 19, 2012

“For the first time, private equity is seriously interested in shipping. Getting to numbers in the billions is not a stretch. It’s more a question of finding the right opportunity set that has a low-enough entry point.” – Wilbur Ross in a Bloomberg interview earlier this month.

(Bloomberg) — Billionaire Wilbur Ross won a judge’s approval to buy shares in a shipping company held by Lehman Brothers Inc., a spokesman for the defunct brokerage’s trustee said.

WL Ross & Co. offered about $110 million for the 34 percent stake in gas-tanker company Navigator Holdings Ltd. Hedge fund Elliott Management Corp., a creditor of the brokerage, objected that Ross’s company, which already owns Navigator shares, would gain a controlling stake without paying a premium for control. Ross answered yesterday in a bankruptcy court filing that it bought most of its Navigator shares last year for the same $25 each that Lehman will receive.

James Giddens, the trustee liquidating the Lehman brokerage, “is pleased with the court’s approval of the sale,” Jake Sargent, a Giddens spokesman, said in an e-mail today. “The sale maximizes the value of LBI’s shares in Navigator for the benefit of customers and other creditors.”

The Lehman brokerage is liquidating separately from its parent, Lehman Brothers Holdings Inc., which is now out of bankruptcy.

Capacity Glut

Ross, whose company manages about $10 billion of assets, told Bloomberg News this month that private-equity investors are increasingly interested in shipping after a four-year rout caused by a glut of capacity.

Apollo Global Management LLC and Blackstone Group LP are among private-equity firms that bought vessels in the past two years. WL Ross joined other investors who spent $900 million a year ago on 30 tankers hauling refined oil products.

The Lehman brokerage, which is liquidating separately from its parent, Lehman Brothers Holdings Inc., hasn’t paid institutional creditors anything from its $25 billion hoard after four years in liquidation. Elliott demanded in June that Giddens sell securities and pay an initial $3.2 billion soon.

Noting the payment demand, the Ross company said Elliott appears to have an agenda that many of the brokerage’s creditors don’t share.
Peter Truell, an Elliott spokesman, didn’t immediately respond to an e-mail seeking comment on the Ross statement.

The Lehman brokerage liquidation is Securities Investor Protection Corp. v. Lehman Brothers Inc., 08-01420, U.S. Bankruptcy Court, Southern District of New York (Manhattan). The parent’s case is In re Lehman Brothers Holdings Inc., 08-13555, U.S. Bankruptcy Court, Southern District of New York (Manhattan).

-By Linda Sandler. Copyright 2012 Bloomberg.

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