Mumbai: Headquartered in Kolkata, the Emami Group is all set to get fresh funds for its trade as the firm is in advanced negotiations with US private equity firm KKR for a structured credit deal worth Rs 2,000 crore.
The money is going to come in the form of debt by KKR and Emami may use the money extended to repay the loans raised by promoters and to meet working capital requirements, suggests recent media reports.
The inception of Emami Group took place in the mid-1970s when two childhood friends, R S Agarwal and R S Goenka, left their management jobs with the Birla Group to set up Kemco Chemicals, Ayurvedic medicine and cosmetic manufacturing unit in Kolkata in 1974. At that time the Indian FMCG market was still dominated by multinationals.
The company was established with a modest capital of Rs. 20,000 and started manufacturing cosmetic products as well as Ayurvedic medicines under the brand name of Emami from a small factory in Kolkata, targeting sales at the Indian middle class. Today, Emami owns businesses in sectors ranging from consumer goods to healthcare, cement, newsprint, biodiesel and edible oil, real estate, solar power, writing instruments and pharmacy retail.
Accordingly to the daily, to finance part of this, the promoters have pledged shares in one of the most successfully run business – the FMCG business of Emami. It’s noteworthy that Emami’s profitability is one of the highest in the FMCG sector.
KKR may earn interest that is expected to be charged in the range of 12-15 per cent secured by the group’s cement and property business.