Blackstone emerges as the front runner to buy Kirloskar Oil Engines
India: The world's biggest private equity fund, Blackstone has emerged as the front runner to buy Kirloskar Oil Engines Ltd (KOEL), the flagship company of the $3.5-billion Kirloskar Group. Promoters own 59.33% of Kirloskar Oil Engines (KOEL) that has a market cap of 4,947 crore at present. Pulak Prasad's Nalanda Capital, with 9.61% stake, is the second largest shareholder in the company that makes diesel engines, agricultural pump sets and generating sets.

Incorporated in 1946, Kirloskar Oil Engines manufactures and services diesel engines (primarily in the range of 2.5 to 740 horsepower) and diesel generator sets. It is the largest producer of non-automotive diesel powered engines in India. Its large engines are used for nuclear, marine and stationary power plants. and power generating units for residential, commercial, marine and defence applications, and offhighway equipment. It is the largest producer of non-automotive diesel powered engines in India.

According to sources, one of the proposals being suggested is splitting the company by demerging its oil engines business into a new entity. Blackstone will step in then to buy controlling stake for around 2,600 crore, or about $400 million, and follow it up with an open offer for an additional 26% stake. Both companies upon demerger will have mirror shareholding. The cash and investments of around 1,000 crore will be left with the old company, which in effect will become a holding company.