Pipavav Shipyard (PSL) promoter SKIL Infrastructure plans to raise up to $300 million by selling shares to private equity (PE) funds just before an IPO due in six months to retire short-term loans it took to buy out co-promoter Punj Lloyd, people close to the transaction said.

SKIL will buy Punj’s 19.5% stake in India’s first private shipyard on Monday morning in a block deal on the stock exchange. The company will spend nearly Rs 1,500 crore to raise its stake from 20% in PSL, including paying Rs 676 crore in cash to Punj Lloyd, and the rest for an open offer at Rs 62 a share to minority shareholders, the persons said.

ET had reported in its March 27 edition that SKIL will buy out Punj Lloyd at a nearly 22% discount to PSL’s Friday closing price.

In 2008, SKIL Infra sold around 4% stake to AIG for valuation $3.5 billion, the persons said. PE firms such as New York Private Equity, Standard Chartered Private Equity, Indus Capital, Citadel, Battery March, Calpers, and Capital International have invested in PSL.

SKIL is launching the open offer to comply with Sebi rules that say a promoter can transfer shares to another promoter only if they are held for more than three years. Punj Lloyd’s lock-in period expires in October.

This is the first time an Indian promoter is buying out its co-promoter before the lock-in expires and making an open offer, the persons said. JM Financial is advising SKIL Infra on the transaction.

SKIL has set up a raft of infrastructure projects in the country since the early nineties, including a railway track in Gujarat and special economic zone (SEZ) projects. The promoters led by Nikhil Gandhi have a history of divesting stakes all along and investing the hefty returns in new projects. But there is a major shift in the case of PSL where the company is consolidating its holdings in an operating company.

SKIL rejected a recent offer from construction giant Larsen & Toubro to take over PSL, the persons said.

SKIL’s buyout will give the Delhi-based infrastructure company Punj Lloyd a profit of Rs 300 crore against an investment of Rs 350 crore in just over two years. The deal will also boost Punj Lloyd’s balance sheet for FY10 as it eclipses the profits from its own operations in three years.