Amtek promoters-backed firm may sell packaging biz
Rollatainers Ltd, a company that is into packaging and food service, is in an advance stage of negotiations to sell off its packaging business.
The company is in the final stage of discussions with three strategic foreign investors and the deal is expected to fetch it Rs 100-150 crore, people with knowledge of the developments said. The sell-off could bring in additional capital for the promoters of Amtek Group, which last year defaulted on a Rs 800-crore payment to its bond-holders.
W.L.D. Investments Pvt Ltd, the Delhi-based investment arm of the Amtek Group promoters, currently owns 74.95 per cent of Rollatainers.
Rollatainers’ revenue went down significantly in the past few years — from Rs 560 crore in 2013-14 to Rs 86.7 crore in 2015-16. And its net profit plunged to Rs 5.6 crore last year from Rs 28.4 crore in 2013-14. Two of the three foreign investors that are in the final list of buyers currently had been trying to venture into the Indian packaging industry for quite some time now, according to sources.
Apart from paper board and flexible packaging solutions and equipments for major consumer goods firms such as Hindustan Unilever, Nestlé, Amul and Britannia, it has a food services arm called Carnation Hospitality. Carnation runs the franchises for Barista, Jamie’s Italian and Wendy’s Burger in India. The current deal will not include the food business of Rollatainers, it is learnt. Amtek Group’s Arvind Dham, however, is looking to sell 30-40 percent of Carnation, Economic Times reported last October.
In March, Rollatainers had sold its carton manufacturing division to a subsidiary company, R T Packaging Limited. Currently, a majority of its revenue comes from the carton and flexible packaging divisions and the deal is expected to settle at nine to 11 times of its EBIDTA (earnings before interest, depreciation, tax and amortisation) within a month’s time.
According a senior industry executive, many of the Indian packaging companies had been sold off in the recent past due to lack of profitability. “Since the recession faded, many Indian packaging and equipment companies had to be sold as prices fell significantly. So many new companies had propped up during the later part of the last decade when competition intensified,” he said. The sell-off, however, could be intended to raise additional funds.
Last month, Dham, the founder chairman of Amtek Auto, told this newspaper that it had already sold of some of its real estates and other assets with the help of US private equity firm KKR and that it was working on realigning its debt and interest.