UPDATE 1-Gulf consortium in talks to buy Dubai oil services firm -sources

Wed Nov 27, 2013 3:05am EST

Related Topics

* Fajr Capital, APICORP, Zamil Group consortium eyes NPS Energy

* NPS Energy sale may fetch between $500-$700 mln - sources

* NPS deal with Norway's Aker Solutions failed last year

By Dinesh Nair

DUBAI, Nov 27 (Reuters) - A group of Gulf investors led by Fajr Capital are in talks to buy Dubai-based oil services firm NPS Energy for up to $700 million, three sources aware of the matter said.

NPS Energy put itself up for sale again after a deal to be bought by Norway's Aker Solutions fell apart last year, Reuters reported in September.

Aside from Fajr, a Dubai-based investment firm backed by Malaysian state fund Khazanah Nasional, the consortium includes APICORP, a development bank established by the Organization of Arab Petroleum Exporting Countries and Saudi-Arabia based investment holding company Zamil Group, the sources said, requesting anonymity as the matter is not public.

A sale of NPS Energy could be worth between $500-$700 million, the sources said, adding the parties are yet to agree on a deal.

"A regional consortium makes a lot of sense for NPS as the asset is pretty large for a single local buyer and looks like internationals are not too keen," one of the sources said.

HSBC Holdings is running the sale process for NPS. The British lender declined to comment.

NPS Energy's Chief Executive Adnan Ghabris declined to comment. Spokesmen for Fajr Capital and APICORP in Dubai declined to comment, while Zamil Group did not immediately respond to a Reuters email seeking comment.

NPS Energy is part of oilfield services company National Petroleum Services, which was formed in 2004 from the merger of oilfield businesses owned by two large family-owned groups in Saudi Arabia and Qatar.

Demand for oilfield services in the Middle East, the world's top oil producing region, has risen in the last few years.

NPS Energy employs around 800-900 people and offers services such as coil tubing, wire-line services, cementing, pressure pumping, well logging and testing.

The company, which one banking source said made earnings before interest, tax, depreciation and amortisation of about $50 million in 2012, counts firms such as Saudi Aramco, the world's top oil producer, and state-owned Qatar Petroleum among its clients.

Fajr Capital has state entities such as Khazanah Nasional, Abu Dhabi Investment Council and the government of Brunei among its shareholders. APICORP has been scouting for acquisitions in the oil and commodities space and last month bought an additional 10 percent stake in Egyptian methanol producer EMethanex from one of its joint venture partner.

Khobar-based Zamil Group has interests in businesses ranging from manufacturing air conditioners to steel fabrication and employs around 12,000 people according to its website.

Last year, Gulf Capital, an Abu Dhabi-based private equity firm, put its majority-owned oil and gas services firm, Gulf Marine Sevices, on the block, hoping to raise about $500 million but the talks collapsed over valuation.

Gulf Capital has hired investment bank Rothschild as a financial adviser for a planned initial public offering (IPO) of the unit on an overseas exchange in 2014, the firm's chief executive said in September.

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