AION Capital Partners Ltd, an India-focused special situations fund, has signed a deal with retail veteran Kishore Biyani to acquire a minority stake in Ryka Commercial Ventures Pvt. Ltd, the holding company for some Future Group firms, two people aware of the development said.
AION will invest $100 million (almost Rs650 crore) to acquire the stake, said one of the people, both of whom declined to be named.
AION Capital Partners is a joint venture between US-based private equity fund Apollo Global Management and ICICI Venture Funds Management Co. Ltd, with $825 million in committed capital. The size of the stake to be acquired could not be ascertained. The announcement is likely to come in a couple of days, said the second of the people cited above.
Future Group companies that come under Ryka Commercial Ventures include Future Lifestyle Fashions Ltd, Future Retail Ltd, and Future Consumer Ltd. Future Lifestyle Fashions sells domestic and foreign brands including Scullers, BARE, Lee Cooper, Indigo Nation, Clarks, Giovani and Mineral. The group’s retail business consists of the hypermarket and supermarket business, led by Big Bazaar, fbb, Food Bazaar, Foodhall and Easyday. The business of Future Consumer consists of agri-sourcing, food infrastructure (India Food Park in Karnataka), manufacturing, consumer goods brands, franchisee and distribution (Nilgiris, Aadhaar).
As on 4 July, the combined market capitalization of Future Consumer, Future Retail, and Future Lifestyle stood at Rs28,863 crore. As of March, Future Consumer had total debt of Rs338.40 crore, Future Lifestyle Rs482.37 crore and Future Retail Rs1,078.40 crore.
Spokespersons for Future Group and AION declined to comment.
This is not the first instance of Biyani selling a stake in his group companies. In April last year, Singapore-based SSG Capital Management Group acquired a 40% stake in Future Supply Chain Solutions Ltd (FSC).
According to an investor presentation from last year, Future Enterprise Ltd said it was looking to monetize investments in Future Group firms to realize Rs10,000 crore in the next five years.
The company has investments in Future Supply Chain Solutions, Future Consumer Enterprise, Future Generali India Insurance Co., Future Generali India Life Insurance Co., Future Lifestyle Fashions, Apollo & Gold Mohur Mills and Staples.
Biyani has also been looking to sell his 50% stake in the life insurance joint venture Future Generali India Life Insurance Ltd. In 2014, a planned stake sale to Larsen and Toubro Ltd’s insurance unit did not materialize and the deal was called off, citing delays in the transaction and obtaining approvals.
In June 2012, Biyani-promoted Future Group had sold its 54% stake in consumer finance company Future Capital Holdings Ltd to private equity firm Warburg Pincus India in an all-cash deal worth Rs692 crore. In May 2012, Biyani had sold a majority stake in debt-laden Pantaloon Retail (India) Ltd, India’s largest listed retail company by revenue, to Aditya Birla Nuvo Ltd, a unit of the Aditya Birla group.
AION was in the news last year after its buyout of the commercial lending and leasing business of GE Capital in India. It had joined hands with former senior GE Capital executives Pramod Bhasin and Anil Chawla to acquire the business.
In March 2017, AION had bought a controlling stake in Planetcast Media Services Ltd, formerly Essel Shyam Communications Ltd, which offers services in digital media distribution and technology, content production and acquisition, and cloud broadcasting.
Source: Mint