One year after hiking its stake in Vadodara-based hospitality firm Sayaji Hotels to 32.87 per cent, private equity firm Clearwater Capital Partners has pressed the part-exit button. Clearwater sold 2.85 per cent or a little less than a tenth of its holding for Rs 6.5 crore or $1.4 million to the promoters on Friday.

According to VCCircle estimates, this marks a return of 1.97x for Clearwater on its initial tranche of the five-year-old investment.

The investment fund had picked 14.9 per cent stake in the hospitality and restaurant chain company, with an investment of around Rs 11.8 crore in May, 2006. Clearwater also invested through foreign currency convertible bonds which were converted into equity last year, giving it a large minority stake in the company. The New York-based special situations fund held FCCBs worth $7.5 million in the company which had been converted into equity at Rs 75 per share last year, giving it 32.87 per cent stake.It also came up with an open offer last year at a price of Rs 115.73 (including interest payment for delay in the offer) but could not find many takers.

Sayaji Hotels scrip shot up 6.7 per cent to close at Rs 123 at BSE on Friday.Clearwater remains the second largest shareholder behind the promoters who together owned 38 per cent as of March 31.

Although a reclassification of certain individual shareholders (who are no longer a part of the promoter group) has led to the decline in total promoters’ stake, the share purchase from Clearwater maintains their total ownership around 38 per cent.

As of March, 2011, the US-based foreign institutional investor (FII) Acacia Partners held 7.5 per cent stake through its various funds in Sayaji. Sayaji operates hotels in Vadodara, Indore and Pune. It also has two subsidiaries, Barbeque Nation Hospitality and Malwa Hospitality. Under Barbeque Nation, it operates a restaurant chain. 

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