Everstone Capital is in advanced talks to sell a 4-5% stake in Burger King India to personal fairness fund Oman India Joint Investment (OIJIF), for an estimated Rs 100- 150 crore, weeks after the IPO of the India franchisee companion of the US-primarily based quick-meals chain was postponed. If profitable, the transaction might shut over the following two weeks, or by mid-April, sources conscious of the developments advised ET.
Everstone Capital, the Singapore-headquartered India-focused mid-market personal fairness agency, owns 99.39% stake in Burger King India, by its funding automobile QSR Asia Pte Ltd.
When contacted, an Everstone spokesperson mentioned there was sturdy investor curiosity in Burger King India and that any share sale prior to the IPO would represent a pre-IPO sale, with out particularly referring to its stake sale discussions.
“Burger King India evinced strong response to its growth story and positioning during the recent IPO roadshows including requests for pre-IPO and anchor. Despite the current situation, there continues to be strong interest. Any sale prior to IPO would be a pre-IPO sale and not a PE stake sale,” the spokesperson mentioned in a written response. Separately, an e mail addressed to Srinath Srinivasan, chief government of OIJIF, didn’t elicit a response until the time of going to press.
Burger King India CEO Raj Verman didn’t reply to calls or textual content messages.
Earlier this month, Burger King India postponed the launch of its Rs 1,000 crore preliminary public providing, in which Everstone was reported to be promoting a minimum of a fourth of its stake, after markets globally underwent a meltdown due to the Covid-19 pandemic.
Everstone Capital had secured the unique rights to develop and function Burger King branded eating places in India in 2013. According to a report by VCCircle, citing sources, Burger King India’s IPO approval is legitimate until January 2021 and should launch the providing as and when market circumstances enhance.
“Burger King India is committed to IPO once the markets stabilise. There is no change in our plan for the IPO,” the PE agency’s spokesperson mentioned.
Priced at mass entry-stage, Burger King competes instantly with market chief McDonald’s. It reported gross sales of Rs 644 crore in monetary yr 2018-19 whereas its losses lowered to Rs 16 crore.
OIJIF, which is backed by State General Reserve Fund of Oman, the sovereign wealth fund of Oman, and State Bank of India, is a progress capital personal fairness fund targeted on investing in the mid-market section in India. It launched its second fund, OIJIF Fund II with a goal corpus of $300 million, and introduced first closure at $220 million throughout January 2017.
Reeling from the Covid-19 outbreak, India’s Rs 4.2 lakh crore restaurant sector is observing retailer closures, job losses and erosion of profitability
In a letter addressed to finance minister Nirmala Sitharaman, NRAI president Anurag Katriar has requested restoration of enter tax credit score, whole and instant deferment of statutory dues inclusive of GST, advance tax funds, PF, customs duties on the central authorities stage and state excise, renewal of liquor licenses, and VAT on the state stage for a interval of twelve months.
“Any deferment to the deal could be the valuations; the industry is facing severe headwinds,” an business official who has labored intently with Burger King mentioned.
Last month, burger and fries chain McDonald’s, with its captive mass attraction and aggressive entry-stage pricing, had named entrepreneur Sanjeev Agrawal, promoter of Delhi-based MM Agrawal Group, as developmental licensee for its operations in north and east India, 9 months after it introduced out former companion Vikram Bakshi’s stake in their three way partnership.