Varun Beverages Ltd, the largest bottler for PepsiCo Inc in India, has increased its stake in its Zambia subsidiary to 90% to benefit from fast-paced growth in the African nation.
The company previously held a 60% stake in Varun Beverages (Zambia) Ltd, it said in a stock-exchange filing. It didn’t disclose financial details of the transaction.
Varun Beverages said it has been successfully running the Zambia operations since last year.
“We have recorded healthy volumes in our first year of operations and are highly profitable already with strong free cash flow generation,” said Ravi Jaipuria, chairman at Varun Beverages.
Jaipuria said Varun Beverages is well-positioned to tap into the under-penetrated market of Zambia through its strong distribution reach and diversified portfolio.
The company recorded sales volume of 10.7 million cases in 2016 in Zambia. It reported earnings before interest, tax, depreciation and amortisation of Rs 46.7 crore in 2016 in the African nation.
Varun Beverages is one of the largest franchisees in the world (outside the US) of carbonated as well as non-carbonated beverages sold under brands owned by PepsiCo.
The company produces and distributes beverages such as Pepsi, Diet Pepsi, Seven-Up, Mirinda Orange, Mirinda Lemon, Mountain Dew, Tropicana Slice and Nimbooz as well as packaged drinking water under the brand Aquafina. In addition, it has the franchise for the Ole brand of PepsiCo products in Sri Lanka.
The company, which counts AION Global, the special situation investment firm jointly run by Apollo Global and ICICI Venture, and Standard Chartered Private Equity as investors, made a tepid debut on the stock markets last November.
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