Aditya Birla Retail Ltd (ABRL) has entered into an agreement with homegrown private equity fund Samara Capital for the sale of its food and grocery retail chain More for about $628 million (Rs 4,300 crore), reported The Economic Times.
The development of the ongoing talks between the two was first reported by ET in May. The deal is likely to close in September.
“We managed to break even after significant cost restructuring in recent times… but the group has decided that it is comfortable with offline apparel retailing and to halt investments in online as well as grocery retailing,” said the report quoting a source.
ABRL, a part of the $43 billion Aditya Birla Group, ventured into food and grocery retail sectors with the acquisition of Trinethra Retail in 2007. It currently operates two different store formats – supermarket and hypermarket under the brand More. It has 523 supermarkets, and 20 hypermarkets across the country.
The group had invested more than Rs 3,000 crore in grocery retail in the past three years, the report said.
ABRL posted Rs 4,194 crore in sales for the year ended March 2017, with net losses amounting to Rs 644 crore. However, the company had a debt of about Rs 6,573 crore on its books and financing costs amounted to Rs 471 crore at the end of March 2017 mainly on account of Trinethra and Fabmall acquisitions a decade ago, and Jubilant’s Total Super Store two years ago .
ABRL competes with the likes of Reliance Retail, Future Group and Avenue Supermart, which runs the D-Mart retail chain.
Samara Capital was recently in the news for planning a $550-million India-focused fund by the end of this year largely for buyout and control transactions. It previously raised two funds worth $260 million and $400 million respectively.
The private equity firm had sold its stake in RBL Bank for about Rs 185.91 crore last year in August. Its other deals in the past include acquisition of facilities management firm Sanjay Maintenance Services Pvt Ltd in April last year, investment of about $25 million in Gujarat-based stent-maker Sahajanand Medical Technologies (SMT) for an undisclosed stake in December 2016, and buyout of pharmaceutical operations from Adcock Ingram Holdings Ltd in April the same year.