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Temasek eyes fan business of Crompton Greaves Temasek eyes fan business of Crompton Greaves

Jan-14-2015 | 0 Comments


MUMBAI: Singapore investor Temasek Holdings has emerged as frontrunner to buy a $200-million stake in the about to be demerged consumer products business of CromptonGreaves, controlled by billionaire GautamThapar, according to multiple sources directly familiar with the matter.

Temasek and Crompton Greaves' promoter have entered into exclusive negotiations, taking the former ahead of rival offers from General Atlantic Partners and Bain Capital, which valued the consumer products division at $900 million.

Crompton Greaves' consumer unit makes fans, appliances, luminaires, home automation and integrated security systems. It reported a revenue of Rs 748 crore in the fiscal 2014 with operating profit estimated at 11.8%.

Last July, Crompton Greaves decided on demerging the consumer business from industrial systems, which manufactures generators, and power systems that sell switchgear products.

Promoter Thapar, who holds 42.7% in Crompton Greaves, had initiated a process to part-sell his stake in the consumer business attracting several offers, including buyout offers, which were rebuffed.

A successful private equity investor is likely to advance a loan to Crompton Greaves and Avantha Holdings, the main investment vehicle of Thapar, which will be converted to shares once the demerger takes shape, sources added. The standalone consumer unit will remain listed with public shareholding.

"Temasek has a limited period exclusivity to clinch a deal, which is still not done," said one of the sources mentioned earlier.

Thapar, through the listed parent, will continue to hold a 25% stake in the standalone consumer unit, which will remain listed. Temasek could own over 20%. Both Temasek and Avantha declined to comment.

Besides Crompton Greaves, the $4-billion Avantha Group has interests in paper and pulp through Bilt, food processing (Global Green), infrastructure (Biltech) and glass containers (JG Glass).

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