Advertisement
Tuesday, Nov 30, 2021
Outlook.com
Outlook.com

Shapoorji Pallonji Group Completes Sales Process Of Eureka Forbes, Sells To Advent For Rs 4,400 Crore

The sale process, which began in November 2019, will help SP Group pare the debt pile and sharpen the focus on the flagship construction and engineering business under Afcons.

Shapoorji Pallonji Group Completes Sales Process Of Eureka Forbes, Sells To Advent For Rs 4,400 Crore
Shapoorji Pallonji Group Completes Sales Process Of Eureka Forbes, Sells To Advent For Rs 4,400 Crore
outlookindia.com
2021-09-20T09:12:03+05:30

After a long wait, the Shapoorji Pallonji Group has closed the sale process of its consumer durables business under the Eureka Forbes label by picking the American private equity fund Advent International’s Rs 4,400-crore offer for a 72% stake.

The sale process, which began in November 2019, will help the over 156-year-old SP Group pare the debt pile and sharpen the focus on the flagship construction and engineering business under Afcons.

The valuation of Rs 4,400 crore for a 72.56% stake is at an enterprise level and subject to closing adjustments and also includes an open offer for the remaining stake after the demerger and listing of Eureka Forbes, the SP group said in a statement on Sunday.

The 156-year-old-Shapoorji Pallonji Group, which owns over 18% in the Tata Group, is sitting on a debt pile of over Rs 20,000 crore of which around Rs 12,000 crore are under the moratorium till 2023 allowed by the RBI to help borrowers tide over the cash flow issues arising from the pandemic.  

“According to a scheme of the arrangement, Eureka Forbes, a 100% subsidiary of Forbes & Company, will be demerged into a standalone company and will be listed on the BSE. Upon demerger and listing, Advent will purchase up to 72.5% of Eureka Forbes's then outstanding stock on a fully diluted basis from SP Group-owned Forbes & Co, and will also make an open offer for the remaining stake.

“The transaction is subject to closing conditions and receipt of the relevant statutory and regulatory approvals,” the statement said without offering a timeline for the demerger and listing.

When contacted, Jai Mavani, executive director at Shapoorji Pallonji & Company told PTI that the Rs 4,400 crore valuation is for the entire stake in the company, which means including the valuation cost of the open offer.

But he could not offer a timeline for the process to complete as the demerger process is pending before the Mumbai NCLT.

This transaction also reflects the company's stated objectives and strategy of significantly de-leveraging and focusing on core competencies and businesses, Mavani said.

“We look forward to working with Marzin Shroff and his team to guide Eureka Forbes next phase of growth and solidify its market leadership,” said  Shweta Jalan, managing director, Advent India PE Advisors.

“Having delivered innovative products and solutions for our ever-growing customer base, we are now buoyant about the opportunity to unlock further growth," Marzin R Shroff, managing director and chief executive of Eureka Forbes.

(With inputs from PTI)

Advertisement

Outlook Newsletters

Advertisement
Advertisement
Advertisement

Read More from Outlook

Omicron Threat: Next 15 Days Crucial To Understand Global Impact

Omicron Threat: Next 15 Days Crucial To Understand Global Impact

The preliminary clinical data coming for the Omicron indicates that it has different sort of symptoms which is mainly intense fatigue.

Oppisition Unity: Act Fast Or Perish, TMC Makes Its Message Ring Louder

Oppisition Unity: Act Fast Or Perish, TMC Makes Its Message Ring Louder

TMC Supremo Mamata Banerjee is set to meet the leadership of the Shiv Sena and NCP in the backdrop of her deliberate decision not to meet Sonia Gandhi.

IPL 2022 Retention: Teams To Reveal Players They Want To Keep

IPL 2022 Retention: Teams To Reveal Players They Want To Keep

Indian Premier League franchises will submit the list of players retained for the 2022 edition on Tuesday (November 30).

'Omicron Virus' Or 'South Africa Variant'? Here's What Not To Call New Covid-19 Strain

'Omicron Virus' Or 'South Africa Variant'? Here's What Not To Call New Covid-19 Strain

The Omicron variant of Covid-19 has led to several discussions on WHO's method of naming virus variants on Greek alphabets. But terms like 'South Africa virus' have remained in use.

Advertisement