BackGati sells minority stake in its cold chain unit to Mandala Capital
Mandala Captial is entitled to pick up to 30% stake in Gati Kausar after the deal
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Mumbai: Logistics company Gati Ltd has sold a minority stake in its cold chain unit—Gati Kausar India Ltd—to Mandala Capital AG Fund Ltd and Mandala Agribusiness Investments II Ltd raising ₹ 150 crore.
Mandala Captial is entitled to pick up to 30% stake in Gati Kausar, Gati’s chief financial officer Sanjeev Jain told analysts in a conference call on Thursday. He did not disclose current equity stake of Mandala Group in Gati Kausar.
Of the ₹ 150 crore, ₹ 30 crore has been invested in the form of equity shares and compulsorily convertible preferential shares and the rest ₹ 120 crore in non-convertible bonds, Gati said in a statement.
Mandala Capital manages private equity funds that invest in companies focused on the agribusiness sector within the Indian subcontinent.
The funds raised by Gati Kausar will be utilized primarily for building a network of cold warehouses across the country over the next three years, enabling the company to offer integrated cold chain logistics and supply chain management, as well as value-added services, Gati said.
Gati Kausar transports refrigerated goods across verticals such as healthcare, meat, poultry, bio-pharma, frozen and fresh produce, dairy products, organized retail and quick-service restaurants.
With an existing fleet size of approximately 200 vehicles, Gati Kausar intends to offer both reefer storage and transportation under one roof.
In August, Mint reported that Gati is planning to sell a minority stake in its cold chain unit and exit its shipping business as part of a plan to reduce debt and cut losses.
Gati, which delivers 5.75 million small parcels, has also decided to sell its money-losing shipping business.
In May 2013, Gati sold a 40% stake in its shipping unit Gati Ship Pvt. Ltd to Hyderabad-based Riba Constructions Pvt. Ltd and 12% to Harvy Comtrade Ltd of Hyderabad, reducing its stake to 48%, Jain of Gati said.
Gati’s sale of its cold chain unit comes at a time when Gateway Distriparks Ltd’s unit Snowman Logistics Ltd raised around ₹ 197 crore and listed on the bourses last month.
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