Nippon Express Picks Up 22% In Future Supply Chain Solutions
Japanese logistics major Nippon Express on Wednesday acquired 22 percent stake in Future Group company Future Supply Chain Solutions Ltd. for over Rs 700 crore.
The companies plan to jointly explore growth opportunities with this deal, Mayur Toshniwal, managing director at Future Supply Chain Solutions said.
The Rs 700-crore equity investment include both primary as well as secondary investment, he said, adding the deal has received all requisite approvals, including from the fair trade watchdog.
As part of this transaction, FSC has issued 37,89,350 shares to Nippon Express at Rs 664 a share, which is a full 22 percent premium to the current market price.
Through this primary issue, Nippon will hold 8.6 percent stake on a fully diluted basis and FSC will raise around Rs 252 crore for funding its near-term growth plans.
The two companies will jointly start the business collaboration from next January.
Nippon Express chief managing officer Satoshi Horikiri said, "this partnership will form an important part of our long-term vision of becoming a logistics company with a strong presence globally.
"We want to increase our sales outside Japan threefold to $12 billion by 2028 from $4 billion now," he added.
The domestic logistics industry is around $180 billion and is growing rapidly.
"We have a vision of becoming Rs 10,000-crore company over the next five to seven years by focusing on consumption- driven sectors offering customised solutions such as warehousing, transportation and distribution," Toshniwal said, adding current revenue is around Rs 1,500 crore.