SSG Capital to pick 40% in Future Supply Chain

SSG Capital Management Group will invest ₹580 crore to pick up a 40 per cent stake in Future Supply Chain Solutions (FSC), a subsidiary of listed company Future Retail.

The deal would entail buying 14 per cent stake from Future Retail and the management team and 26 per cent stake of another existing shareholder, Li& Fung-owned SKC Ltd.

The valuation of FSC is up to ₹1,450 crore.

The balance stake of FSC Solutions would be held by Future Retail and the management team, which includes its CEO & Managing Director Anshuman Singh.

The deal would also mark the exit of SKC, a part of Fung Capital, the private equity arm of the Hong King-based Li& Fung Group.

SSG Capital Management, an alternative asset management firm in the Asia-Pacific region, has about $2 billion in assets under management.

Future Retail is the flagship company of Kishore Biyani-owned Future Group with formats like Big Bazaar and Food Hall.

In a statement, Kishore Biyani, MD, Future Retail, said: “Future Retail has followed a multi-pronged approach for strengthening its balance sheet and this partial monetisation of its stake in FSC is a step in this direction.

“It will result in estimated proceeds of up to ₹185 crore for Future Retail’s stake. Given that the supply chain arm is of critical importance for furtherance of Future Retail’s overall business objectives, Future Retail will continue to a hold majority stake of 57.4 per cent in FSC.”

During the year ended March 31, 2015, FSC registered income from operations amounting to ₹408 crore and earned a net profit of ₹25 crore. Future Retail currently holds 70.17 per cent stake in FSC.