Private equity (PE) investor SSG Capital Management Group is investing up to Rs 580 crore to acquire 40 per cent stake in Kishore Biyani-promoted Future Supply Chain Solutions Ltd (FSC) from the existing shareholders of the company.
The deal values FSC at Rs 1,450 crore.
“This will include 14 per cent stake to be acquired from Future Retail Ltd (FRL) and the management team collectively, and 26per cent from another minority shareholder SKC 1 Ltd (SKC),” the company said in a press release.
The 26 per cent from another minority shareholder SKC 1 is part of Fung Capital, the PE arm of families of Dr Victor Fung and Dr William Fung, the controlling shareholders in Fung Group.
“We are excited about this transaction including our partnership with SSG. It is a step towards our stated intent of optimal monetization of some of the investments held by FRL,” Kishore Biyani, MD, Future Retail said in an official statement.
“FRL has followed a multi pronged approach for strengthening its balance sheet and this partial monetization of its stake in FSC is a step in this direction. It will result in estimated proceeds of up to 185 cr for FRL’s stake. Given that the supply chain arm is of critical importance for furtherance of Future Retail’s overall business objectives, FRL will continue to a hold majority stake of 57.4% in FSC,” he added.
Bantry Capital PTE Limited, Singapore acted as a sole financial advisor.
During the year ended March 31, 2015, FSC registered income from operations amounting to 408 cr and earned a net profit of ` 25 cr.
At present, FRL holds 70.17 per cent equity stake in FSC, with SKC holding 26 per cent and the remaining mainly held by the management team.