Private equity giant Blackstone-controlled garments company Gokaldas Exports Ltd is to sell one of its several manufacturing plants located in its home city Bangalore to apparel major Raymond Ltd for an undisclosed amount, according to a stock market disclosure.
The firm has inked a pact to sell its entire stake in a wholly-owned arm Robot Systems Pvt Ltd to Raymond. This unit did not have any significant operations and had zero revenues in the year ended March 31, 2014. The deal, in effect, revolves around an asset which is to be transferred to this entity.
In February, Gokaldas Exports' board decided to transfer the building and related assets of its property at Peenya Industrial Area in Bangalore to Robot Systems. It had also approved a plan to sell its property at Nacharam, Hyderabad to another wholly owned subsidiary of the company. These await a shareholders’ approval.
According to the company's last annual report, it had around 30 manufacturing units spread across Karnataka and Andhra Pradesh. Most of these are in Karnataka with many in Bangalore itself.
Gokaldas Exports is controlled by global PE major Blackstone, which had acquired a controlling stake in the firm in August 2007. Blackstone had bought majority stake in the company for Rs 485.2 crore and later hiked its holding through an open offer.
Separate emails sent to Blackstone and Gokaldas Exports seeking further details on the reason for selling the asset did not elicit any response by the time of filing this article.
Gokaldas Exports is one among a bunch of PIPE investments of Blackstone which are underwater. Others include NCC, Monnet Ispat, MCX and Financial Technologies.
At present, the PE firm holds just under 58 per cent stake in Gokaldas Exports. Last year it sold some shares in the secondary market. Its investment is now valued much lower than what it had invested to gain control of the company.
(Edited by Joby Puthuparampil Johnson)