Siva alters Barista strategy

Stanchart gets mandate to oversee 15-20% stake sale.

Ace investor C Sivasankaran has appointed Standard Chartered Bank as merchant banker for roping strategic investors into his coffee chain, Barista.

The move comes ahead of global major Starbucks' plan to enter the country next year.

Sources close to the development said Sivasankaran had asked the merchant banker to find investors for a 15-20 per cent stake in Barista. The coffee chain has 140-odd stores across the country.

The development contradicts the general perception that the Chennai-based businessman might pull out of Barista completely.

Sivasankaran, who has perhaps never lost money in a stake sale except in the sale of his 10 per cent in Bharti Telecom back to Sunil Mittal, would extract a premium from this deal as well, industry sources said.

The businessman had bought 65 per cent in Barista from the Amit Judge-controlled Turner Morrison two years ago, and later also bought the Tata group's 35 per cent stake. His Sterling Group was learnt to have paid nearly Rs 65 crore for the acquisition of 100 per cent in Barista.

Investment banking sources said the process for the sale of stake was at an early stage.

"It will take a few months to seal the deal," they said. The exact price tag for the 15-20 per cent stake could not be ascertained.

Although financial details regarding the closely held coffee chain were not available, industry sources said it had posted sales of around Rs 45 crore last year.