US private equity firm Warburg Pincus is buying a majority stake in Uture Group's non-banking finance company Future Capital Holdings Ltd from Kishore Biyani, founder of Future Group, The Economic Times yesterday reported.
The New York-based firm, which has invested more than $40 billion in over 650 companies, will acquire Kishore Biyani-controlled Future Group's 56 per cent stake in Future Capital Holdings.
Senior executives close to the transaction told the paper that the deal has been finalised at Rs165-Rs170 per share, a premium to Friday's closing price of Rs138.
The transaction, which will be discussed today in Future Capital's board meeting, will to reduce debt and improve cash flows.
The Rs10,000-crore Kishore Biyani-led Future Group, India's largest retailer, had last year hired Morgan Stanley to run the sale process of Future Capital and had held talks with several potential buyers including private equity firms JP Morgan and Kohlberg Kravis Roberts as well as Piramal Group.
Future Group has planned as many as 18 divestment and fund-raising transactions, including taking on a strategic partner in its flagship Big Bazaar stores, as Mumbai-based group seeks to reduce its debt of more than Rs7,800-crore, with more than a third of the debt residing in Future Capital.