New Delhi, Nov 6 (PTI) Private equity firm EverstoneGroup today said it has agreed to buy home appliances brandKenstar from debt-ridden Videocon group.
The Videocon group, which is reeling under a debt of overRs 40,000 crore, has been looking for buyers for its variousassets, including Kenstar, in a bid to pare its debt.
"Everstone Group (Everstone) has agreed to buy Kenstar,"the company said, adding the sale includes the purchase andtransfer of the brand and businesses under the brand on agoing concern basis including a state-of-the-art manufacturingfacility, as well as assets from Century Appliances Ltd (anassociate of the Videocon Group).
The company, however, did not disclose the deal size. Butthe transaction, as per various reports, is pegged at avaluation of about Rs 1,300 crore. The transaction is subjectto statutory approvals and specific clearances.
The deal, which has seen negotiations for around an year,saw interests from various companies like Crompton GreavesConsumer Electricals, Havells, Voltas, Orient Electric andSymphony, among others.
Crompton Greaves said the bid made by the company hasexpired and it has not extended the validity of the same.
"Under the agreement, the existing management team atKenstar, led by business head Rajiv Kenue, will continue tomanage the business, and will be strengthened significantly bythe operational capabilities, additional resources andfinancial investments of the Everstone Group," the investmentfirm said.
While Kenstar will operate as an independent business, itwill be controlled by Everstone.
Besides, Everstone will also enter into a strategicalliance with Videocon group, among others, for manufacturing,cooperation on Kenstar brand, and developing new products, thecompany said.
Kenstar, which was launched in October 1996, makes airconditioners, kitchen appliances, air coolers, mixer grindersand and health appliances.
"Everstone looks forward to significantly invest in theKenstar brand and leverage operating expertise to unlock itstrue potential by strengthening dealer network, supportingproduct innovation and investing in brand building," EverstoneGroup Managing Director Avnish Mehra said.
The sale of Kenstar is a part of the Dhoot-familypromoted Videocon group efforts to bring down the heavy debtpile from its books.
ONGC Videsh Ltd, the overseas arm of state-owned Oil andNatural Gas Corp (ONGC), had in June 2013 bought 10 per centstake in the Offshore Area 1 from Videocon Group for USD2.475 billion. This stake was later divided between OVL andOil India Ltd in 60:40 ratio.
The proceeds were used to repay bank loans in India andabroad.
The Videocon group has also decided to merge its direct-to-home business to Dish TV. It had also sold its spectrum insix circles for a consideration of Rs 4,428 crore to telecommajor Bharti Airtel. PTI PRJ KRHMKJ.
This is unedited, unformatted feed from the Press Trust of India wire.