The Tata Group restructures shareholding pattern in North Indian Plantation Operations

The shareholding pattern of Amalgamated Plantations Private Limited (APPL), the new company formed by Tata Tea after restructuring its North Indian Plantation Operations (NIPO), is close to finalization. The Tata Group will hold 33-35% in APPL through Tata Investment Corporation (15%) and Tata Tea (18-20%). IL&FS and the World Bank private equity firm IFC will hold 20% stakes each in APPL, while consultancy firm Globally Managed Services will hold 12%. The balance 13-15% will be held by employees and workers of the company.

The company has received SEBI approval for the formation of APPL. Once we get shareholders’ approval, the company will come into existence with effect from April 1, 2007. The transaction process, however, remains to be completed.

Read more in The Economic Times article.
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Tata Tea to divest stake in tea plantations to IFC, IL&FS, workers

Hershey to buy 51% stake in Godrej Beverages & Foods

Hershey, America’s largest chocolate and confectionery-maker, is acquiring majority stake in the food and beverage business of the Godrej Group. Hershey is acquiring 51% equity stake in Godrej Beverages & Foods for Rs. 238 crores or about $54 mn. Hershey would also license Godrej Beverages & Foods some of its trademark rights for a lump sum payment of about $2 mn in addition to royalty payments of 5% for domestic sales and 8% for exports.

With this investment, financial investor IL&FS will exit from the venture while the holdings of the Godrej Group and that of an individual investor A Mahendran would come down. Post-acquisition, Hershey would hold 51% equity while Godrej Industries would hold 43% stake with the remaining 6% to be held by A Mahendran, a senior executive with the Godrej Group. The deal values the equity stake of Godrej Industries, a listed arm of the Godrej Group, at Rs. 200 crores. The deal values Godrej Beverages & Foods at Rs. 466 crores. Hershey would pick up the majority stake through multiple transactions. This would include acquiring the 40% equity held by IL&FS, acquisition of the convertible preference shares held by IL&FS, Godrej Industries and Mr. Mahendran as also subscription to fresh issue of capital in the company.

Godrej Beverages & Food represents the foods and beverages business of the Mumbai-based Godrej Group. It was formed last year when Godrej Industries transferred its foods division to another group company Godrej Tea. The combined entity was renamed as Godrej Beverages & Food Limited. With a turnover of around Rs. 400 crores, the company is engaged in categories such as tea, edible oils, health drinks including soymilk, tomato puree, fruit drinks and bakery fats.

Read The Economic Times article.

Tata Tea to divest stake in tea plantations to IFC, IL&FS, workers

Tata Tea will divest 80% in its North Indian Plantation Operations (NIPO), and will spin it off to a number of investors and workers. The value of Tata Tea’s 80% stake in NIPO, which consists of 24 estates in West Bengal and Assam, is pegged at Rs. 290 crores, with the entity’s total valuation at Rs. 359 crores. The separation of NIPO will be effective April 1, 2007.

The company will detach itself from plantation management with the divestment. A couple of years ago, Tata Tea handed over the management of its south Indian plantations to its workers. The management of the company will be vested with the workers and Tata Tea will handle the marketing and distribution of NIPO’s produce. World Bank PE arm International Finance Corporation (IFC) and ILFS will each pick up a 20% stake in NIPO. This will be IFC’s first overseas investment in the plantation sector.

Globally Managed Services (GMS), a firm promoted by Mumbai-based Assamese consultant Ranjit Barthakur may pick up 10-15% and the workers of the 24 estates another 15%. The balance will be held by a couple of agri-companies. The agri-companies are being roped in to cash in on Tata Tea’s multi-cropping activities, so that NIPO emerges as an agricultural company with tea as its mainstay.

IFC and ILFS may likely pay nearly Rs. 72 crores each for their acquisition, while GMS will pay Rs. 36-54 crores, depending on the size of its shareholding. The workers will have to shell out Rs. 54 crores; the amount is planned to be raised through loans from the company spread over 5-10 years.

Read more in the Business Standard article.

IL&FS to float $1 bn PE fund with Abu Dhabi Investment Company

IL&FS and Abu Dhabi Investment Company (ADIC) have joined hands to float a $1 bn private equity fund to invest in infrastructure projects in West Asia and North Africa. Both the companies are expected to commit around $50 million to the joint venture. The fund would look for investment opportunities in the upstream energy sector, in addition to roads, power and water supply management projects. ADIC would also consider investing in the Indian downstream sectors such as power.

Read more in the Business Standard article.

Trinity Capital buys 10.43% in Pipavav Shipyard

Trinity Capital has bought a 10.43% stake in Pipavav Shipyard Limited for Rs. 104 crores. Pipavav Shipyard has been promoted by Nikhil Gandhi-backed Sea King Infrastructure. IL&FS and EXIM Bank are the existing investors in Pipavav Shipyard; they have a majority 51% stake in the company. As part of the transaction, Trinity will build a 150 acre-township in the vicinity of the shipyard. This will provide housing, recreational facilities, schools, hospitals and commercial offices.

Pipavav Shipyard plans to build the largest integrated ship building yard in India, near the Pipavav port in Gujarat. The yard will also be the fifth largest in the world. It will have a capacity of 300,000 tonnes (dead weight tonnage). The Pipavav port was developed by the Nikhil Gandhi Group and is now handled by Maersk. The 175-acre shipyard will have the capability to build ships and vessel types ranging from aircraft carriers and luxury liners to oil tankers. It will have the capacity to build 12 large ships simultaneously. The project is likely to see investments of Rs. 8000 crores over the next 7 years. The shipyard will be strategically located between the two busy ports of Kandla and Mumbai. It will also be the only major shipyard between Dubai and Singapore.

Read the article in Business Standard.
Related Post: Trinity to raise additional funds of $ 1bn for Indian realty

Goldman Sachs to pick up 5% stake in ITNL for Rs. 90 crores

Goldman Sachs is about to pick a 5% equity stake in IL&FS Transportation Networks (ITNL) for around Rs. 90 crores. ITNL is a vehicle promoted by IL&FS to spearhead its initiative in transportation infrastructure development.

This will be the second private placement in ITNL in the last three months. In October 2006, US-based private equity fund Trikona Capital bought 2.5% stake in the company for around Rs. 40 crores. Trikona also announced a $100-mn partnership with parent company IL&FS for investments in real estate and infrastructure.

ITNL is the promoter of the Noida toll road project and owns 22.6% equity in Noida Toll Bridge Company. Noida Toll Bridge is listed on the AIM market in London Stock Exchange. ITNL currently has a portfolio of 10-11 road sub-sector projects, which are in the development phase and a pipeline of such projects in the planning phase. The company, which has got road projects in Ahmedabad, Rajasthan, has recently won an annuity contract in Chhattisgarh. Incorporated in 2000, IL&FS has domiciled most of its transport sector investments and resources in ITNL for its surface transportation projects. The company also intends to participate in green field projects and provide advisory services. Already, the holdings of IL&FS and existing financial investors in the IL&FS sponsored projects are being transferred to ITNL.

Last week, Goldman Sachs bought a 5% stake in the National Stock Exchange. IL&FS was one of the deal makers in the transaction.

Read The Economic Times article.

Trikona Capital to invest $18 mn in Fortis Healthcare

Trikona Capital is investing to the tune of $18 mn in Fortis Healthcare, a company promoted by the founders of Ranbaxy Laboratories. Earlier, George Soros’ Soros Private Equity Partners and Blue Ridge Capital were believed to have invested $50 mn in Fortis to buy a 10% stake in the company. Fortis has filed for an IPO and intends to raise Rs. 730 crores from the issue.

Fortis needs the funds to further its expansion plans as well as to write-off the debt it had incurred while acquiring Escorts Heart Institute and Research Centre. Fortis Healthcare has chalked out some meg-expansion plans, partly through acquisitions, which will require investments of Rs. 2250 crores by 2010.

Trikona Capital is a real estate-focused private equity firm; it is planning to invest around $1 bn in the Indian market in the next one year. So far, it has made investments of up to $150 million in India. Apart from Fortis, Trikona’s investments include a minority stake in IL&FS Transportation and Networks for $10 million, $20 million in an integrated township project in Thane, $22 million in a residential project in Mumbai and around $55 million in an IT park in Greater Noida. The fund also has partnerships with HDFC and IL&FS to make investments in India.

Read The Economic Times article.