PHOTO
Agility Global Plc, a conglomerate and investor, has issued corporate guarantees of 75.6 million euros ($78.4 million) to some of the banks that hedged its stake in Danish freight forwarding firm DSV AS.
The Abu Dhabi-listed Agility Global entered a derivative transaction in 2023 with Morgan Stanley Bank-N.A., Citibank, National Association and Goldman Sachs Bank Europe SE in relation to shares representing up to 7.5 million of Agility’s stake in DSV.
The multi-year funded equity collar agreements with the banks allowed Agility to draw down EUR1 billion of “relatively cheaper liquidity” which was then used to strengthen its balance sheet.
The recent corporate guarantees were issued as part of “an optimisation of the current hedging structure,” Agility said. The number of hedged shares remains the same and no additional funding was extended to it.
Agility Global, which is 51% owned by Kuwait logistics giant Agility Public Warehousing Co., has a 9% stake in DSV. Agility Global nine-month 2024 net profit was $97.4 million versus $3.5 million in the year-ago period.
Meanwhile, DSV last year signed an agreement to acquire Schenker from Deutsche Bahn in a transaction worth EUR 14.3 billion. When the deal closes, expected in 2025, DSV is set to become one of the world’s largest freight forwarder.
A collar is an options strategy used to protect against volatility of an asset, and limits both gains and losses.
(Writing by Brinda Darasha; editing by Daniel Luiz)
