Blackstone Group, among the world largest buyout firms, has accelerated its investments in India, pulling off on Monday its second buyout deal in less than three months by picking up a 50.1% stake in Gokaldas Exports Ltd, the country’s largest garments exporter, for $116 million or Rs482.5 crore, and setting aside another $49 million for an open tender mandated under local securities laws for an additional 20% of the target’s shares.
The holding of the promoters in Gokaldas Exports, the Bangalore-based Hinduja family (not related to the Hinduja Group) will come down from 70.1% to 20% before the open offer.
Blackstone said on Monday that it sees large opportunities in the garments outsourcing business and expects firms from its overseas portfolio and extended network to outsource manufacturing to a 400-acre so-called special economic zone that Gokaldas is setting up at Kanakapura outside Bangalore. “We are associated with a large network of retailers through our global portfolio of investments who may want to outsource to India,” said Akhil Gupta, managing director of Mumbai-based Blackstone Advisors India Pvt. Ltd.
Companies running operations from special economic zones or SEZs enjoy several incentives. The Gokaldas SEZ, expected to employ around 50,000 people, will house units of several garment manufacturers. The company will have a unit that will employ around 4,000 people in the SEZ.
“More companies will outsource (to) us,” said Rajendra Hinduja, managing director of Gokaldas Exports, referring to the benefits of the sale. “We will get access to textile companies in the US that have investments from Blackstone.” The names of such companies were not immediately available. Gokaldas earns more than 96% of its revenue from exports to global brands such as Tommy Hilfiger, Nike and Adidas, and to large retailers such as Walmart Inc. and Gap Inc.
Blackstone, which will pay Rs275 per share or a premium of 25% for the shares of Gokaldas, had initially prospected the Bangalore target as a ‘growth deal’ with the intention of acquiring a minority stake. Blackstone has invested $525 million, excluding Gokaldas, in India till date and intends on deploying $2 billion in the next two years.
(Source: Live Mint)
Showing posts with label Textiles. Show all posts
Showing posts with label Textiles. Show all posts
Tuesday, August 21, 2007
Monday, July 9, 2007
Wolfensohn's private fund picks 6% in Fabindia
John Bissell's export house of 1958 – better known as Fabindia today –has an unusual backer. Former World Bank president James Wolfensohn's private investment fund has picked up 6% stake in the country's marquee Indian ethnic wear company for $11 million. This puts the valuation of Fabindia at around Rs 750 crore.
Even though the Indian government does not allow foreign investment in multibrand retail, the policy was partially relaxed recently and FDI up to 51% allowed in single brand retail. Following this, several luxury brands such LVMH, Chritian Dior and Hermes began converting their franchisee agreements into joint ventures.
Fabindia generates annual revenue of Rs 200 crore selling ethnic menswear, womenswear, household furnishing, handicrafts and organic food. The company declined to declare the profit figure but said its balance sheet was “highly profitable”.
Fabindia has extensive expansion plans and intends to grow the number of stores from 61 to over 200 in the next four years. The money raised will be used to strengthen its supply chain. Fabindia is setting up community-owned joint ventures in the rural areas with artisans and craftspersons as shareholders.
Fabindia is essentially a retail platform for the hand made (both textile and non-textile) which brings rural craft to urban markets. At present it sources from 21 states and works with 15,000 craftspersons. The company said that in the next four years it would create 100,000 sustainable jobs in the rural, handicraft sector.
Mr Wolfensohn, who was the president of World Bank for 10 years from 1995 to 2005, plans to open an investment banking group along with his children and friends. He wants to raise $500 million to $1 billion for investing in countries like India. He also plans to open an office in the country.
(Source: Economic Times)
Even though the Indian government does not allow foreign investment in multibrand retail, the policy was partially relaxed recently and FDI up to 51% allowed in single brand retail. Following this, several luxury brands such LVMH, Chritian Dior and Hermes began converting their franchisee agreements into joint ventures.
Fabindia generates annual revenue of Rs 200 crore selling ethnic menswear, womenswear, household furnishing, handicrafts and organic food. The company declined to declare the profit figure but said its balance sheet was “highly profitable”.
Fabindia has extensive expansion plans and intends to grow the number of stores from 61 to over 200 in the next four years. The money raised will be used to strengthen its supply chain. Fabindia is setting up community-owned joint ventures in the rural areas with artisans and craftspersons as shareholders.
Fabindia is essentially a retail platform for the hand made (both textile and non-textile) which brings rural craft to urban markets. At present it sources from 21 states and works with 15,000 craftspersons. The company said that in the next four years it would create 100,000 sustainable jobs in the rural, handicraft sector.
Mr Wolfensohn, who was the president of World Bank for 10 years from 1995 to 2005, plans to open an investment banking group along with his children and friends. He wants to raise $500 million to $1 billion for investing in countries like India. He also plans to open an office in the country.
(Source: Economic Times)
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