Blackstone India honcho Akhil Gupta is stepping down from the board of the apparel company Gokaldas Exports Ltd, citing personal reasons. Gupta's resignation comes after two independent directors – Prince Asirvatham and Partha Sarthi Sarkar – also resigned earlier this month.
An external spokesperson of Blackstone said that Gupta has stepped down as he has board commitments across Blackstone’s 18 portfolio companies in India. Gupta, the senior managing director and chairman of Blackstone India, will still remain involved with the management of Gokaldas.
"The board representation of Blackstone has been passed from Akhil Gupta to Richard Saldanha. Gupta continues to be directly involved in managing Gokaldas Exports," an e-mailed statement from Blackstone stated in response to VCCircle's queries.
However, the spokesperson declined to comment on the resignation of independent directors.
Saldanha, an executive director of Blackstone India and part of its operations team, is currently the chairman of Gokaldas. Blackstone's managing director Mathew Cyriac also sits on the board and Gokaldas has also appointed former Blackstone executive director Gautam Chakravarti as CEO.
Blackstone had acquired 50.1 per cent stake in Gokaldas from Bangalore-based Hinduja family in August 2007 and made an open offer, building up 68.27 per cent stake for $171 million. This was its second major buyout after it acquired the business process outsourcing company Intelenet for $260 million.
Since the buyout, Gokaldas has seen its revenues fall as recession and slowdown hit its key markets in the US and Europe. Its key customers include Nike, Sears (USA & Canada), Zara, GAP, Macy's and Banana Republic, among others. Gokaldas saw its revenues fall over 12 per cent to Rs 1,002 crore with net loss widening over 50 per cent to Rs 133 crore in FY12, as compared to FY11.
The shares of Gokaldas, which were up over 4 per cent during intra-day trading, closed 0.15 per cent down to Rs 68 a unit on Thursday. Blackstone had picked up stake in Gokaldas at Rs 275 a unit, which would imply that the private equity giant is currently 75 per cent under water on its investment.
(Edited by Sanghamitra Mandal)