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PE firm Everstone Group to acquire Kenstar from debt-ridden Videocon

The Videocon group is reeling under debt of over Rs 40,000 cr, has been looking for buyers for its various assets

Press Trust of India  |  New Delhi 

PE firm Everstone Group to acquire Kenstar from Videocon

Private equity firm on Monday said it had agreed to buy home appliances brand from debt-ridden group. The group, which is reeling under a debt of over Rs 40,000 crore, has been looking for buyers for its various assets, including Kenstar, in a bid to pare its debt. "(Everstone) has agreed to buy Kenstar," the company said, adding the sale includes the purchase and transfer of the brand and businesses under the brand on a going concern basis including a state-of-the-art manufacturing facility, as well as assets from Century Appliances Ltd (an associate of the Group). The company, however, did not disclose the deal size. But the transaction, as per various reports, is pegged at a valuation of about Rs 1,300 crore.

The transaction is subject to statutory approvals and specific clearances. The deal, which has seen negotiations for around a year, saw interests from various like Crompton Greaves Consumer Electricals, Havells, Voltas, Orient Electric and Symphony, among others. Crompton Greaves said the bid made by the company has expired and it has not extended the validity of the same. "Under the agreement, the existing management team at Kenstar, led by business head Rajiv Kenue, will continue to manage the business, and will be strengthened significantly by the operational capabilities, additional resources and financial investments of the Everstone Group," the investment firm said. While will operate as an independent business, it will be controlled by Everstone. Besides, Everstone will also enter into a strategic alliance with group, among others, for manufacturing, cooperation on brand, and developing new products, the company said. Kenstar, which was launched in October 1996, makes air conditioners, kitchen appliances, air coolers, mixer grinders and health appliances. "Everstone looks forward to significantly invest in the brand and leverage operating expertise to unlock its true potential by strengthening dealer network, supporting product innovation and investing in brand building," Managing Director Avnish Mehra said. The sale of is a part of the Dhoot-family promoted group efforts to bring down the heavy debt pile from its books. Videsh Ltd, the overseas arm of state-owned Oil and Natural Gas Corp (ONGC), had in June 2013 bought 10 per cent stake in the Offshore Area 1 from Group for $2.475 billion. This stake was later divided between and Ltd in 60:40 ratio. The proceeds were used to repay bank loans in India and abroad. The group has also decided to merge its direct-to-home business to Dish TV. It had also sold its spectrum in six circles for a consideration of Rs 4,428 crore to telecom major Bharti Airtel.

First Published: Mon, November 06 2017. 18:27 IST