Goldman Sachs to pick significant stake in Amber Enterprises

The private investment unit of Goldman Sachs Group Inc has agreed to acquire a significant equity stake in Amber Enterprises Pvt Ltd, one of the largest original equipment manufacturers (OEMs) of consumer durables in India, for an undisclosed amount.

As part of the transaction, Broad Street Investments (Singapore) Pte. Ltd (BSIPL) and MBD Bridge Street 2015 Investments (Singapore) Pte Ltd (MBD), the two affiliates of Goldman Sachs, will subscribe to compulsorily convertible preference shares of Amber pursuant to a primary infusion in Amber.

They will also acquire 36 per cent equity stake in the company, as per their filings with Indian competition watchdog CCI. CCI is yet to approve the transaction.

It could not be ascertained whether existing investor Fairwinds Private Equity (formerly Reliance Equity Advisors India Ltd) will be part or fully exiting the company through this transaction.

Separate emails sent to Amber, Goldman Sachs and Fairwinds PE seeking further information on the aforesaid development did not elicit any response by the time of filing this article. Separate media reports had earlier said citing sources that the promoters of the firm may also sell stake to Goldman Sachs as part of the overall deal.

Fairwinds had acquired 34 per cent equity stake in Amber in two tranches for Rs 110 crore in 2012 and 2013. Prior to that, Amber had raised Rs 30 crore from IFCI Venture Capital's Green India Venture Fund through an issue of compulsory convertible debentures.

Incorporated and promoted in 1992 by Kartar Singh, Amber manufactures air conditioners, microwaves, components for refrigerators and other consumer durables for brands such as LG, Panasonic, Philips, Whirlpool, Videocon, Godrej, Blue Star and Voltas.

The company owns nine factories that produce original equipment for some of the biggest brands in India, according to its website. Besides, the group runs Amber Aviation, which operates aircraft charters and provides commercial pilot training.

Fairwinds PE was launched in 2013 by Ramesh Venkat, former chief executive officer at Reliance Equity Advisors, the  PE arm floated by Anil Ambani’s Reliance Capital. The fund manager was renamed following a spin-off.

Fairwinds is currently managing Reliance Alternative Investments Fund - Private Equity Scheme I, a $200-million fund that the team had raised in 2009-10 from domestic investors with anchor investment from Reliance Group. This fund is now fully invested.

Its portfolio consists of Delhi-based Pathways World School, supply chain solutions firm Shankara Infrastructure Materials, digital printing firm Max Flex and Imaging Systems, kitchen appliances manufacturer Butterfly Gandhimathi Appliances, EMS firm Amber Enterprises, valves maker Dembla, FMCG firm VVF and footwear maker Khadim India.

On the other side, Goldman has become an active PE investor in India. Recently, it invested Rs 441 crore ($66 million) in PE-controlled hospitality firm SAMHI Hotels Pvt Ltd. Earlier in July 2015, the PE firm had injected in Azure Hospitality Pvt. Ltd, the Delhi-based firm which runs a pan-Asian casual-dining chain under the Mamagoto brand. It also invested in Piramal Realty.

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