Future Consumer Enterprise Limited (FCEL), the food and consumer goods arm of Future Group, is to raise Rs 368 Crore from Black River Asset Management, the private equity arm of US food and agriculture giant Cargill.
The funds will be used to finance companies various expansion plans and business initiatives.
“The company’s board has approved raising ‘USD 45 million (about Rs 301.5 crore)’ through preferential issue of equity-linked securities to Black River Food 2 Pte Ltd. The food company will issue compulsorily convertible debentures (CCDs) of face value Rs 100,000 per CCD to Black River Food 2 Pte Ltd, a wholly owned subsidiary of Food Fund,’ said PTI, citing BSE filings.
“The CCDs are convertible into equity shares of FCEL within a period not exceeding 18 months from the date of issue of CCDs, at conversion price of Rs 22.73 per share,” it said.
FCEL also said that it has decided to raise USD 10 million through an issue of warrants to its promoters.
“The warrants are convertible into equity shares at a conversion price of Rs 22.73 per share, exercisable at a date within 18 months from the date of allotment of warrants,” the filing said.
As per PTI, the board in its meeting held on December 26 also approved entering into a master franchisee arrangement with Future Retail Ltd(FRL) whereby the convenience stores network primarily comprising of ‘KB’s Fair Price’, ‘KB’s Conveniently Yours’, ‘Big Apple’ and ‘Aadhaar’ will be operated by FRL.
As per terms of the arrangement, a separate long-term supply agreement will also be entered into between FCEL and FRL for supply of branded products to Future Retail Ltd (FRL), it said.
As per the agreement, the company will continue to pursue its operation as sourcing, manufacturing, branding and distribution of food and FMCG products.
FCEL said it will also tie up with Black River’s Food Fund 2 “to explore possible upstream capabilities in the food and allied sectors”.