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ABD to sell 12% stake to TPG, Carlyle; keen on Tilaknagar deal

LiveMint logoLiveMint 21-05-2014 PTI

Mumbai: Allied Blenders & Distillers (ABD), which owns the largest selling mass-whisky Officer’s Choice, will divest up to 12% of its stake to two overseas PE players — TPG and Carlyle Capital — for about $250 million to fund its expansion and growth through buyouts.

The company, promoted by Kishore Chhabria of the Shaw Wallace fame, has also reiterated its intention to pursue its talks with Tilaknagar Industries, despite the fact talks are stuck on valuations.

“We have signed two term sheets with Carlyle and TPG already. We are looking at raising $200-275 million in part equity and debt and are ready to divest up to 10-12% to them,” vice-chairman and chief executive officer Deepak Roy told PTI in an interaction in Mumbai on Wednesday.

The money will be used for expansion and capacity addition, which also includes buyout, he said, adding the company has lined up Rs450-500 crore capex this fiscal, which will be used to acquisition and bottling capacity expansion.

Roy further said, the company is “keen to buy Tilaknagar Industries, the makers of the Mansion House brandy, but they are demanding an exorbitant amount, which we are not ready to accept.

“We don’t want end up sick ourselves by stretching our balancesheet too thin. Having said that I want to reiterate that we are still keen on the takeover and not a minority stake in that company.”

After the management of the UB group changed hands, practically and recently became majority foreign-owned, ABD with 25 million cases in sales last fiscal has become the largest domestic player now.

Roy also said, ABD is not interested in any other buyout as there is great synergies between Tilaknagar and his company in which he owns 5% stake.

“They are strong in the South with the Mansion House brandy brand, while we are strong only in the Andhara market down South where we are keen to increase our footprint.”

It can be noted that Tilaknagar’s Mansion House is equally owned ABD and the Dutch liquor maker Herman Jansen. Tilaknagar bought 50% local sales rights from the Dutch owner last October.

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