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Ambarish Mukherjee

New Delhi , Jan. 18

The US-based retail coffee-house chain Starbucks' India foray is to be a single brand venture in partnership with a newly formed Indian company, New Horizons Retail Private Ltd, in which Mr Kishore Biyani of Pantaloon Retail has 49 per cent stake. Starbucks plans to sell its merchandise under its own name.

In New Horizons Retail Private Ltd, 51 per cent stake is held by the Chief Executive of Indonesia-based specialty retailer Adiperkasa, Mr P.T. Mitra.

According to the plans, the joint venture company would engage in developing and managing the chain of Starbuck Cafes in India and would also possess the trademark licence from the US-based parent company.

Starbucks will set up the Indian joint venture through its Singapore-based subsidiary, Starbuck Investor, and would initially pick up 18 per cent stake in the Indian company while the remaining 82 per cent would be held by New Horizons.

Approval from the FIPB has been sought for Starbucks Investor to invest $1.12 million, accounting for 18 per cent stake in the joint venture company, with the option to increase its stake up to 51 per cent in the paid-up capital of the joint venture company as per laws governing single-brand retail in India.

Seeking nod to hike stake

Starbucks has also sought permission to increase its stake in the Indian joint venture through the dual option of either buying out the existing shares from the Indian shareholders or to increase its stake in the joint venture by picking up fresh shares.

The joint venture company has also sought permission from the FIPB to allow it to pay royalty of six per cent of domestic sales to the parent company. Since domestic laws allow royalty payment of only five per cent, FIPB permission would be required to pay a higher rate of six per cent, sources said.

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