Kreon Financial Services Ltd, a Non Banking Finance Company (NBFC) based in Chennai, on Friday said it is planning to acquire aro-und 51 per cent stake in Indo-Italian joint venture firm Aran KitchenWorld India Pvt Ltd, as part of strategic diversification.
The company today informed the BSE that it has signed a share purchase agreement with the promoters of Aran Kitchen World India Pvt Ltd, a company in the modular kitchen segm-ent. Aran KitchenWorld is a joint venture between Italian modular kitchen firm Aran World and Chennai-based Bohra Kitchens of Bohra Group, with 49 per cent and 51 per cent stake holdings respectively.
The NBFC would be acquiring around 51 per cent stake in the company through the agreement, said a company official from Kreonn Financial. “The strategic investment shall provide company growth inorganically and will help it to have its presence in one of the most growing business segment of retail industry,” said the statement.
The announcement also stated that post the acquisition, Aran KitchenWorld India would be a subsidiary of Kreon Financial.
However, the joint venture partners has to decide on details on dilution of stake from each parties and the valuation of stake could be arrived in only after that, said officials from both the companies.
Kreon is looking at the diversification as a strategy to grow in retail segment, especially with the changing market conditions and the moves to open up retail sector to foreign direct investors are expected to increase the opportunities in the sector.
The company, which was listed in 1994-95, has around Rs 6 to 7 crore as asset under management and expects to sustain growth in the financing sector.
Meanwhile, Aran Kitchen World is looking at the strategic investment from Kreon to increase its capital and to increase number of stores across the country, said an official from the company. The details of expansion plans would be announced by the company soon. Presently, it has around nine showrooms in different parts of the country.
Aran World has announced equity investment into its erstwhile Indian distributor, KitchenWorld India under Bohra Kitchens, in 2008 by picking up 49 per cent stake. The name was changed to Aran KichenWorld India Pvt Ltd post acquisition.
The shares of the company closed at around Rs 23 crore revenue in the last fiscal and it is expected to reach Rs 30 crore revenue this fiscal, said the company official.
