Express distribution company Gati Ltd will exit Gati Kausar India Ltd, its cold chain solutions business, to focus on express distribution and e-commerce.

Gati Ltd, a unit of Allcargo Logistics Ltd, will sell its nearly 70 per cent stake in Gati Kausar to existing minority shareholder Mandala Capital AG Limited, a private equity firm focused on investments across the food value chain.

The transaction is expected to close in a month, Gati said in a statement without disclosing the deal value.

Mandala, which currently holds about 30 per cent, will become the controlling shareholder in Gati Kausar.

The transaction will help Gati pare its consolidated gross debt by around ₹100 crore. With this, Gati would have reduced its consolidated gross debt by more than 50 per cent over the last 12 months.

Transformation journey

Gati has been on a transformation journey to focus on asset-light, high-return on equity businesses after it was acquired by Allcargo Logistics last year.

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It has sold or closed down four non-core businesses to focus entirely on the express distribution and e-commerce businesses and regain market leadership position.

Gati Kausar provides temperature-controlled transport service across verticals comprising healthcare, meat, bio-pharma, dairy products, organised retail and quick-service restaurants. The company operates a 5,500-pallet warehouse at Dharuhera in Haryana, a 300-pallet warehouse in Delhi for city distribution and a 3,500-pallet leased warehouse in Mumbai. With a fleet of 200 refrigerated vehicles, Gati Kausar can transport cargo at temperatures as low as -25 degree Celsius.

Published on May 26, 2021