Burger King India in talks to raise $20m financing from PE funds

Photo by matthew Feeney on Unsplash

With its initial public offering (IPO) plans impacted by the coronavirus (COVID-19) pandemic induced market crash, Everstone Capital backed-fast food chain Burger King India Ltd has been engaged in talks to raise around Rs100-150 crore from private equity funds, said two people aware of the development.

Burger King India was planning to launch its IPO later this month and had filed the red herring prospectus with the registrar of companies on 11 March. The market crash following the rapid global spread of COVID-19 forced the company to defer the public offer temporarily.

Burger King India was planning to raise around ₹480 crore in primary capital, for loan repayments, expanding its store network, the RHP filed by the company shows. Its promoter —QSR Asia Pte Ltd, planned to sell a part of its stake in the company through the IPO. Collectively, the share was supposed to be worth over ₹1,000 crore. QSR Asia is owned by private equity firm Everstone.

With the IPO now temporarily pushed back, the company has been engaged in talks with private equity firms to raise capital till the time markets stabilize and consumer demand returns to normal, said one of the people cited above, requesting anonymity.

“They are in talks with PE funds including Oman India Joint Investment Fund (OIJIF) for raising ₹10 crore or more, which will be used for store expansion and loan repayments. They have an annual mandate to expand their store network to a certain number and they need quite a bit of capital to set up these company-owned stores,” said the other person cited above, also requesting anonymity.

According to the draft prospectus filed by the company in November, Burger King India had 216 company-owned restaurants and eight sub-franchised restaurants across 47 cities in India, including Delhi-NCR, Mumbai, Pune, Chennai, Hyderabad, Bengaluru, Chandigarh, Ludhiana, Amritsar and Kochi.

“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. Burger King India is committed to IPO once the markets stabilize. There is no change in our plan for the IPO,” said a spokesperson for Everstone.

Emails sent to OIJIF did not elicit a response.

Burger King India’s revenue from sale of food and beverages nearly doubled to ₹633 crore, on yearly basis, in FY19. Its same-store sales grew 29% in the given period and losses reduced to ₹38 crore from ₹82 crore in FY18.

Burger King India is not the only company whose IPO plans have been impacted by COVID-19.

Specialty chemicals maker Rossari Biotech Ltd which was planning to launch its IPO in the same week as Burger King India has also deferred its plans, according to a Mint report. Antony Waste Handling Cell Ltd, which had opened its initial share sale on 4 March, had to withdraw the public offering after it failed to attract enough investor interest in volatile markets, despite having extended the IPO beyond its original three-day period.

This article was first published on livemint.com

Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.

Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.