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Private equity (PE) investor SSG Capital Management Group is buying 40% stake in Kishore Biyani-promoted Future Supply Solutions (FSC) for Rs 580 crore from Future Retail (FRL) and Fung Group, promoted by Hong Kong billionaire Victor Fung. The transaction values the company at Rs 1, 450 crore.
The deal will include 14% to be acquired from Future Retail and the management team and 26% from another SKC 1, which is part of Fung Capital, the PE arm of families of Dr Victor Fung and Dr William Fung, the controlling shareholders in Fung Group.
Kishore Biyani, managing director, Future Retail said, “It is a step towards our stated intent of optimal monetization of some of the investments held by Future Retail. 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," Biyani said.
It will result in estimated proceeds of up to Rs 185 crore 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.” Biyani said.
During the year ended March 31, 2015, FSC registered income from operations amounting to Rs 408 crore and earned a net profit of Rs 25 crore. FRL currently holds 70.17% equity stake in FSC, with SKC holding 26% and the remaining mainly held by the management team.
Shyam Maheshwari, Partner at SSG Capital, said “We are very enthusiastic about partnering with Future Group in this journey. This transaction will enable us to participate in one of the leading and fast growing logistics & supply chain Company in India.” Bantry Capital PTE Limited, Singapore acted as a sole financial advisor.
SSG Capital Management is a successful alternative asset management firm in the Asia Pacific region, with over $2 billion of assets under management.
