Future Consumer Enterprise to raise Rs368 cr from PE,promoters

Co to raise the money through a preferential issue of equity-linked securities to Black River Food 2 Pte Ltd

Future Group's food firm Future Consumer Enterprise today said it plans to raise around Rs 368 crore from promoters and PE fund Black River Food 2 Pte Ltd to finance its various expansion plans and business initiatives.

The company in a filing to the BSE said that its board has approved raising "$45 million (about Rs 301.5 crore)" through preferential issue of equity-linked securities to Black River Food 2 Pte Ltd.

The food company will issue compulsorily convertible debentures (CCDs) of face value Rs 100,000 per CCD to Black River Food 2 Pte Ltd, a wholly-owned subsidiary of Food Fund.'

"The CCDs are convertible into equity shares of FCEL within a period not exceeding 18 months from the date of issue of CCDs, at a conversion price of Rs 22.73 per share," it said.

The Future Group company will raise $10 million through an issue of warrants to its promoters.

"The warrants are convertible into equity shares at a conversion price of Rs 22.73 per share, exercisable at a date within 18 months from the date of allotment of warrants," the filing said.

The primary purpose of the fund-raising is to finance various expansion plans and business initiatives of Future Consumer Enterprise (FCEL) and improvement of costs and maturity profile of existing debt.

The board in its meeting held on December 26 also approved entering into a master franchisee arrangement with Future Retail Ltd whereby the convenience stores network primarily comprising of 'KB's Fair Price', 'KB's Conveniently Yours', 'Big Apple' and 'Aadhaar' will be operated by FRL.

In terms of this arrangement, a separate long-term supply agreement will also be entered into between FCEL and FRL for supply of branded products to Future Retail Ltd (FRL), it said.

As an 'Integrated Food and FMCG company', FCEL will continue to pursue its strategic intent of 'farm to fork', by focusing on sourcing, manufacturing, branding and distribution of its products, it added.

In addition, FCEL shall also enter into a Strategic Alliance Agreement with Black River Food 2 Fund LP ('Food Fund 2') for a larger cooperation to build/invest in upstream capabilities in the food and allied sectors, it added.

In a separate filing, Future Consumer Enterprise said a board committee has "approved grant of 1,50,00,000 stock options to employees/directors of the company including that of the subsidiary companies under 'FVIL Employees Stock Option Plan-2011'".

FCEL is an integrated food company with operations that range from sourcing of basic food items such as (rice, wheat, spices and pulses) grading, processing, packaging and turning these and more categories (dairy and bakery, juices, frozen foods, snacks, ready to eat meals, dips and sauces) into brand.