Everstone To Buy Kenstar From Videocon As Crompton Greaves Backs Out
Everstone’s purchase of Kenstar from Videocon to be sealed in the “near future”.
Private equity firm Everstone Group has agreed to buy the Kenstar brand from debt-laden Videocon Industries pipping Crompton Greaves which had made an offer last month.
The proposed sale will include the transfer of the Kenstar brand and its businesses including a manufacturing facility and assets from Videocon group company Century Applicances Ltd., Everstone said in a media statement. The amount of the deal has not been disclosed however it is expected to be closed “in the near future”, the statement said.
The asset sale is an attempt by Videocon to purge its debt burden which is over Rs 43,000 crore. The group is finding it difficult to repay loans, and continued losses have squashed the stock value by 85 percent this year.
Everstone said it will operate Kenstar as an independent company led by the existing management team headed by Rajiv Kenue. The private equity firm will provide “operational capabilities, additional resources and financial investments”. to Kenstar. Everstone will also “significantly invest in the Kenstar brand” as it is a marquee household name with a strong recall, the release said.
The company will also enter into a strategic alliance with Videocon for manufacturing, developing new products and “cooperation on Kenstar brand”, the statement added.
In October, Crompton Greaves Consumer Electricals Ltd. had also made an offer for Kenstar.
Kenstar makes coolers, air conditioners and other home appliances such as mixer grinders, food processors, electric kettles, microwave ovens, water heaters and ceiling fans.
This is Everstone’s second buyout in the last two years. It had acquired Hindustan Unilever’s bread and bakery division under the Modern brand in April 2016. The company claimed that in less than 18 months the Modern Foods business has been completely revamped and seen rapid growth as an independent company, according to the statement.