Goldman Sachs look to join hands with Bhartias of Jubilant for HCCB stake buy, to finance upto Rs 3500 cr
Bhartia family of the Jubilant Group led by brothers Shyam and Hari Bhartia is in advance negotiations with Goldman Sachs to partner with them to acquire a 40% stake in Hindustan Coca-Cola Beverages (HCCB), the wholly owned bottling arm of the US beverage giant in India – the 5th largest market of the Atlanta based beverages giant.
Goldman Sachs is expected to finance the special purchase vehicle (SPV) created to own the HCCB stake, deploying Rs 3000-3500 crore through a convertible preferred equity instrument. A similar sized investment is being made by the Bhartia family themselves, said people aware of the development.
The investment by the Wall Street bell weather will be routed through the fast growing Goldman Sachs Alternatives vertical – an overarching vertical that does growth and private equity, hedge fund, real estate and private credit investments.
As per the terms of the agreement, that is in the getting stitched together, Goldman Sachs has agreed to cap their upside on the investment at 20% IRR with some downward protection. Goldman will subscribe to compulsory convertible preference shares that will get flipped during the planned listing of HCCB to facilitate their exit. Treated as a quasi-equity instrument, these deal terms will not include a coupon as is typical of debt trades. The initial public offering (IPO), expected in the coming 2-3 years, will follow a waterfall mechanism, with senior secured lenders getting priority on repayment. The Goldman investment will sit in between the debt – a
