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| Gati forms JV with Japanese firm Kintetsu World Express |
| Press Trust of India / Hyderabad Feb 13, 2012, 15:34 IST |
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Gati Ltd, a city-based express distribution and supply chain solutions provider, has formed a joint venture with Kintetsu World Express, a Japanese global logistic service major.
According to the JV agreement, Gati will transfer its Express Distribution and Supply Chain (EDSC) business to the new JV company -- Gati-Kintetsu Express -- in which Kintetsu will buy 30% stake for nearly Rs 268 crore, Gati said in a statement today.
"Under the JV agreement, Gati will hold 70% stake and 30% will be held by KWE. As part of the transaction, Express Distribution and Supply Chain (EDSC) business of Gati will move into the joint venture company through a Business Transfer Agreement.
"KWE will invest Rs 2,67.7 crore for its 30% stake in the JV through a combination of primary and secondary acquisition of shares," the statement said.
Shares of Gati touched lower circuit at Rs 41.90 on the BSE today in afternoon.
The funds raised from the transaction will be primarily used to reduce debt. The JV Company shall be consolidated in financials of Gati, it added.
Mahendra Agarwal, Founder and CEO of Gati Ltd said, "The partnership will help us leverage KWE’s global customer base, develop world class infrastructure capabilities, enhance our distribution services and further strengthen our leadership position in India."
Satoshi Ishizaki, CEO of KWE, said the partnership with Gati will enable KWE to further expand and strengthen its global operations, with the Indian market increasingly growing in size and importance.
The joint venture company will support large customer base of KWE who have operations in India, simultaneously strengthening KWE’s distribution capabilities into the Indian Market.
Together KWE and Gati will partner in supporting business expansion of domestic and international customers in the Indian market.
The JV shall also invest in high-end 3PL facilities, including temperature controlled warehouses.
KPMG Corporate Finance was the exclusive financial advisor to Gati Limited, it further said.
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