TVS Capital sells Landmark stake back to Trent; may invest in publishing unit

Tata Group’s retail arm Trent Ltd is buying out the shares held by TVS Shriram Growth Fund-I in its book retailing subsidiary Landmark for Rs 84 crore. TVS Shriram Growth Fund-I, which is managed by Chennai-based TVS Capital, invested Rs 65 crore in Landmark in 2009.

Under the agreement, Trent has given TVS Shriram an option to invest in its subsidiary Westland Ltd at a future date. Westland is involved in publication and distribution of fiction and non-fiction books. Some of the titles it has published are Amish Tripathi’s Immortals of Meluha and Ashwin Sanghi’s Chanakya’s Chant.

“Further, it has been agreed between the parties that the fund would retain an option to invest in a minority stake in Westland Ltd (also a subsidiary of the company) at a future date,” said the filing.

Shares of Trent closed at Rs 1,145.2 a unit, down 1.13 per cent.

Under the deal, Trent will buy the entire shareholding of TVS Shriram Growth Fund-I – 1,825,074 equity shares of Rs 10 each. TVS Shriram had bought shares worth Rs 50 crore in Landmark from Trent and the rest Rs 15 crore was invested through a fresh issue.

Landmark is one of India’s largest book and music retailer besides toys and gaming. According to its FY12 annual report, it had 19 operational stores across the country. In the same year, Landmark recorded 12 per cent decrease in total income to Rs 223 crore, with a negative profit before tax of Rs 31.27 crore.

Trent said it would “continue to pursue the build-out of the Landmark format, increasingly focusing on family entertainment categories and seeking to integrate these operations with the Westside business. This is aimed at realising cost and other operating synergies.”

This will be the second exit of TVS Capital after it sold its stake in third-party logistics service provider TVS Logistics Services at 2.23x to private equity major Kohlberg Kravis Roberts & Co. L.P. (KKR).

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(Edited by Sanghamitra Mandal)

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