Mumbai-based private equity firm Tano Capital is acquiring 20 per cent equity stake in plastic moulded luggage maker Safari Industries India Ltd for Rs 49.8 crore (around $8.5 million) through a preferential allotment of shares, according to a stock market disclosure.
The board of directors of Safari Industries at its meeting held on June 16, 2014 approved the issue of up to 8,30,000 equity shares to Tano Capital at a price of Rs 600 per share, which will value the transaction at around Rs 49.8 crore (around $8.5 million).
The company has also received board approval to issue up to 3,30,000 share warrants to its promoter Sudhir M Jatia at a price of Rs 600 per equity share in one or more tranches.
The aforesaid developments, however, are subject to approval from the shareholders of the company for which an extra-ordinary general meeting will be held on July 16, 2013 in Mumbai.
Currently, the promoters of the company own 74.99 per cent equity stake. Post the twin issue and factoring in a full conversion of warrants into equity, the promoters’ holding will shrink to 62 per cent while the PE firm will own 20 per cent in the company.
This is the third new investment by Tano and the second PIPE deal since January 1 this year. Most recently it agreed to buy a stake in Shilpa Medicare and previously struck a deal to invest in Sanghvi Brands.
Safari Industries was founded in 1980 and offers plastic moulded suitcases, briefcases and vanity cases among other products.
In the quarter ended on March 31, 2014, the company reported a decline of 83.22 per cent in its net profit at Rs 0.24 crore compared with Rs 1.43 crore in the year-ago period. Sales of the company, however, increased by 58.74 per cent to Rs 43.78 crore in the quarter from the same period in previous fiscal.
(Edited by Joby Puthuparampil Johnson)