Companies & Sectors
Tree House Education to buy MT Educare's pre-schooling division

Tree House Education that has a total of 302 pre-schools across 37 cities, would buy pre-schooling division of MT Educare

Mumbai: Tree House Education and Accessories Ltd, one of the leading providers of educational services said it signed a non-binding memorandum of understanding with MT Educare Ltd for buying the company's pre-school division comprising six centres at Mumbai and Pune, reports PTI.

No financial details were provided. The transaction will be closed after the usual due diligence, a company statement said.

Commenting on the development, Rajesh Bhatia, promoter and Managing Director, Tree House Education said, "Tree House wishes to utilize company assets more judiciously and we are happy to sign this agreement with MT Educare to acquire its pre-school divisions in Mumbai and Pune. These agreements will help the company in realising more revenue from the leased premises without any additional capital or manpower deployment."

The past six months have seen Tree House create substantial student intake capacity across the country, Bhatia said.

Tree House Education has a total of 302 pre-schools across 37 cities out of which 240 are self-operated.


Canara Robeco launches new gold savings fund

The new gold savings fund scheme would invest predominantly in units of Canara Robeco gold ETFs

Mumbai: Canara Robeco Asset Management Co Ltd (CRAMC), the investment managers of Canara Robeco Mutual Fund, on Monday launched a fund-of-fund scheme called Canara Robeco gold savings fund, where the customers can invest in gold, reports PTI.

The new fund is an open-ended fund-of-fund scheme, which will invest predominantly in units of Canara Robeco gold exchange traded funds (ETFs), the CRAMC said in a release.

"Given the current global uncertainties, gold is fast becoming an alternate asset with increasing demand from several central bankers and investors globally. In the domestic market too, rising investment demand, increased risk aversion and high inflationary conditions favour Gold as a good investment option for the next few years," Canara AMC investment head Ritesh Jain said.

The minimum investment in the scheme would be Rs5,000 and it is open for subscription till 18th June.

Canara Robeco is a joint venture between state-run Canara Bank and the Holland-based Robeco, which is an asset management specialist.


Warburg Pincus buys Future Capital Holdings stake for Rs560 crore

US-based private equity Warburg Pincus, which bought 53.7% stake in Future Capital Holdings at Rs162 per share, would inject additional Rs100 crore and make an open offer for the company


Mumbai: Kishore Biyani-led Future Group, which has a debt of over Rs5,000 crore, on Monday said it is selling 53.67% stake in Future Capital Holdings to US-based private equity Warburg Pincus to raise around Rs560 crore, reports PTI.


As per the share purchase agreement, Warburg Pincus would inject additional Rs100 crore into Future Capital Holdings (FCH) and also make an open offer under the takeover code of Securities and Exchange Board of India (SEBI).

"This transaction is in line with our stated intention to exit from non-core businesses of Pantaloon Retail and is aimed at deleveraging and further strengthening the balance sheet of the company," said Kishore Biyani, founder and chief executive, Future Group.

Biyani-led Future Group, whose core retail business formats include Big Bazaar, Food Bazaar, e-zone and Pantaloon, has a debt of over Rs5,000 crore.


Pantaloon Retail holds 55% stake in Future Capital. Earlier this year, Pantaloon Retail had formed a high powered 'review committee' with the mandate to consider various options for realignment and divestments.


"As part of the transaction, Pantaloon Retail India and its wholly-owned subsidiary Future Value Retail Ltd will sell its stake in FCH at a price of Rs162 per share to Cloverdell Investment Ltd, an affiliate entity of Warburg Pincus," the Group said in a statement after signing of the agreement.


The share price of Rs162 per share is at a premium of 14% over the prevailing market price.


It further said that V Vaidyanathan, vice chairman and managing director, would continue to head the company. Further Vishal Mahadevia, managing director, Warburg Pincus would be inducted to the Board of Directors of FCH.


As per the SEBI norms, Warburg Pincus will have to make an open offer of 26% to the shareholders of Future Capital Holdings. Open offer provides an opportunity to the existing investors to exit the company.


The board of FCH also approved a preferential allotment of shares to Warburg Pincus worth Rs100 crore.


"We welcome the investment of Rs100 crore of incremental Tier-I capital into the company. The company is poised to grow in the MSME space," Vaidyanathan said.

Morgan Stanley acted as the lead financial advisor to Pantaloon Retail and Future Value Retail. Enam Securities acted as the co-advisor to Future Group.


For the fiscal ended March 2012, Future Capital Holdings reported a net profit of Rs105.8 crore, a jump of 115% from Rs49.1 crore in the year ago period. Its asset base stands at Rs4,700 crore.


The company, formed in 2007, provides consumer and mortgage loans. Its asset quality has improved during the last fiscal with the gross non-performing asset ratio dropping to 0.08% from 0.25% a year ago.


Warburg Pincus manages assets worth about $40 billion globally and has also invested in Indian companies across sectors.


At 3.17pm, FCH was trading 4.4% higher at Rs143 and Pantaloon Retail was 7.3% up at Rs148.95 on the BSE. In the intra-day trade, FCH shares jumped 9.45% to a high of Rs149.95.


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