Apollo Global, ICICI Venture JV invests Rs600 crore in Varun Beverages

AION's primary investment of Rs300 crore is in the form of NCDs while the rest has been acquired from existing investors

Mumbai: AION Capital Partners, the largest special situation fund in India, launched by global private equity (PE) firm Apollo Global Management Llc and domestic PE fund ICICI Venture, has invested Rs600 crore in Varun Beverages Ltd, a bottling and distribution franchisee of PepsiCo India Holdings Pvt. Ltd.

AION Investments II Singapore Pte Ltd (AION) has invested in the company through a mix of primary infusion and secondary purchase from existing investors. AION’s primary investment of Rs300 crore is in the form of non-convertible debentures (NCDs). Proceeds of these debentures will be used by Varun Beverages for refinancing existing debt and to accelerate growth. In addition to this, AION also acquired compulsorily convertible debentures from existing investors for Rs300 crore, said Varun Beverages on Friday.

Standard Chartered Private Equity (SCPE) is an existing stakeholder in Varun Beverages, $48 million funding in 2011 and $32 million in a follow-on in 2012.

Varun Beverages is promoted by the R.J. Corp. group which comprises diversified business interests—from beverages, fast-food restaurants, ice-creams and dairy products to education, healthcare and hospitality.

“AION’s investment will enable Varun Beverages to further accelerate its growth plans," said Ravi K. Jaipuria, chairman of Varun Beverages.

“AION is extremely pleased to partner with the R.J. Corp. group, which has over four decades of experience in the Indian consumer industry," said Parth Gandhi, managing director at AION.

Varun Beverages is a bottler under the Pepsi brand, with the license to supply them in the territories of Uttar Pradesh, Haryana, Rajasthan, Delhi, West Bengal, Goa, the North East, Uttarakhand, Punjab, Chandigarh, Himachal Pradesh, parts of Maharashtra and parts of Madhya Pradesh.

The firm, through its subsidiaries, also has a presence in Sri Lanka and Nepal.

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