The report notes that this is to partially fund the equity investment required by the company for its 40 per cent stake purchase in Coca-Cola’s Indian bottling unit
To partially fund the equity investment needed by the company for its 40 per cent stake purchase in The Coca-Cola Company’s bottling unit in India, Goldman Sachs Asset Management has provided USD 600 million to Jubilant Bhartia Group, according to a report by Bloomberg.
The report noted that Goldman Sachs Asset Management’s hybrid fund financed this part by subscribing to the convertible preference shares issued by the group. The fund is usually longer in tenure, and the report added that it hangs between traditional debt and equity.
Earlier, Coca-Cola said that the Jubilant Bhartia Group will be acquiring a minority stake in Hindustan Coca-Cola Holdings. The total acquisition cost is around USD 1.5 billion, the report added, while noting that the conglomerate will fund the rest USD 900 million needed for the acquisition with USD 300 million in debt and USD 600 million of equity.
The report highlighted that Jubilant BevCo and Jubilant Beverages, the subsidiaries of the group, issued rupee-denominated bonds totalling USD 658 million-equivalent to fund the deal. As far as the convertible preference shares are concerned, they are one of the ways through which companies raise capital to fund their expansions as well as operations. It enables them to avoid taking on debt, while restricting the potential dilution of selling additional common stock, the report noted.
