Promoters of the Jubilant Bhartia Group have initiated a process to sell minority stakes in their listed companies in order to raise Rs 2,000 crore, sources familiar with the development told Economic Times.
This, it added, will be used in part to finance the acquisition of a 40 per cent stake in Hindustan Coca-Cola Beverages (HCCB).
Another report by Moneycontrol citing sources said that the Bhartia family is likely to sell around 6 per cent stake in Jubilant Ingrevia, a 3 per cent in Jubilant Pharmova and a 2 per cent stake in Jubilant FoodWorks. These numbers could change, depending on the market condition and investor interest for the individual stocks, they added.
The proceeds from the sale of stakes in Jubilant FoodWorks, Jubilant Pharmova, Jubilant Ingrevia and Jubilant Industries will be in addition to the $600 million (Rs 5,100 crore) that Goldman Sachs Asset Management has raised to fund the deal.
According to the people who talked to Economic Times, the group is also in the process of divesting non-core assets across its food and pharma businesses to raise money.
The deal values Coca-Cola’s local bottling arm at Rs 31,250 crore including debt. At this enterprise value, the report maintained, the stake will cost Rs 12,500 crore.
While Jubilant Bhartia Group did not respond to the publication on the deal, according to its sources, Morgan Stanley is advising the promoters on the divestment of non-core assets and sale of minority stakes in the listed firms.
Jubilant Bhartia X Hindustan Coca-Cola Beverages
Jubilant Bhartia Group had announced in December that it had entered into a definitive agreement to acquire a 40 per cent equity interest in HCCH through Jubilant Beverages for a purchase consideration of Rs 12,500 crore. The deal had received approval from the Competition Commission of India on May 1.
HCCH is the parent company of HCCB, the largest Coca-Cola bottler in India.