Friday, March 9, 2007

Flemingo Duty Free Shops sells 15% stake to Citigroup Venture Capital International; awaits regulatory nod

Citigroup Venture Capital International will acquire 15% stake in Flemingo Duty Free Shops Private Limited. Flemingo runs duty-free shops at various airports and seaports. The deal is valued at more than Rs. 100 crores, as per data available from Foreign Investment Promotion Board (FIPB).

Flemingo would initially issue convertible preference shares to Citigroup for about Rs. 100 crores. These preference shares would be converted into equity at a later date for a premium. Citigroup’s shareholding in Flemingo would be up to a maximum of 15% of the paid-up equity of the company.

Flemingo has sought FIPB approval to issue 1 mn convertible preference shares for Rs. 1000 each to Citigroup. The green signal from the Board is yet to materialize since the Finance Ministry plans to go into details of the deal.

FIPB had deferred Flemingo’s proposal pending completion of investigation and due action by revenue department. Currently, Flemingo International, a company based in British Virgin Islands, holds 51.22% equity stake in Flemingo while various NRIs hold 24.87% stake. After conversion of Citigroup’s preference shares, Flemingo International, NRIs and Citigroup would respectively hold 43.54%, 21.14% and 15% in Flemingo, taking the total FDI to 79.68%.

Read more in The Economic Times article.

1 comment:

ilanit said...

In September I would have speculated that MS would not be treating a first-tier Orange Country business investment like Blackstone this way. But as the Fall has progressed and the potential liability increased it is clear that banks are willing to risk even their largest clients to wriggle away from some of these deals.