Jubilant Foodworks To Buy 10.76% Stake In Barbeque Nation For Rs 92 Crore
Jubilant Foodworks Ltd. has agreed to acquire a stake in Barbeque Nation Hospitality Ltd. as the operator of Domino’s Pizza and Dunkin’ Donuts stores in India forays into newer cuisines.
The food service company will acquire 10.76%—or 36,50,794 fully paid-up equity shares of the face value of Rs 5 apiece—in the casual dining restaurant chain. The transaction, an all-cash deal amounting to nearly Rs 92 crore, is expected to be completed by Jan. 25, according to an exchange filing.
“We’re happy to announce our investment in Barbeque Nation — a differentiated, casual dining restaurant brand of scale with strong unit economics,” Shyam S Bhartia and Hari S Bhartia, chairman and co-chairman of Jubilant Foodworks, were quoted as saying in an exchange filing. “We’re confident that the proposed investment will create value for our shareholders.”
Barbeque Nation owns and operates 138 restaurants in 73 cities in India and 7 abroad as on Nov. 30, 2019. Its revenue for the year ended March 2019 rose 25.8% year-on-year to Rs 742.5 crore. It also operates an Italian restaurant chain under the brand name Toscano, according to the filing.
It had filed its draft red-herring prospectus with the market regulator in February this year, but its initial public offering hasn’t hit the market yet. The company intends to raise funds to pay back debt and for general corporate purposes.
The company has a total rated debt of Rs 131.5 crore, ICRA Ratings said in a report dated Sept. 1 on the restaurant chain. The company has raised nearly Rs 300 crore of equity since FY13 from private equity players to fund its growth, the rating agency said.
Barbeque Nation, ICRA said, needs to make interest and principal payments ranging between Rs 53 and Rs 57 crore to lenders between Sept. 1, 2020, and March 31, 2021, as it had opted for the RBI-mandated moratorium for term loans made available to borrowers as a result of the Covid-19 pandemic. This stake sale will help it service its debt.