Jain Farm Fresh Foods Limited (“JFFFL”), a subsidiary of Jain Irrigation Systems Limited (“JISL”) today announced that it has successfully raised Rs. 4,022 Million from funds managed by Mandala Capital Limited (“Mandala”), an investment manager focused exclusively on Indian Agribusiness.
JFFFL is a newly formed entity under which the global food processing business of JISL will now be held. JISL has been building its food processing business since 1994, into a leading global manufacturer of mango, banana, guava, strawberry and other fruit–based pulps, clarified juices and concentrates, as well as dehydrated vegetables such as onion, garlic and ginger.
- JFFFL made a preferential issue of Equity Shares and Compulsorily Convertible Debentures (“CCDs”) to Mandala for a total subscription amount of INR 4,022 Million. 60% of the investment is in equity and balance in CCDs. The CCDs will be compulsorily converted into further Equity Shares of JFFFL within 60 months from the date of allotment. Upon conversion of the CCDs, Mandala will own a total stake of either 14.27% or 17.35% in JFFFL, based on revenue parameters achieved by JFFFL’s business.
- JFFFL will use these proceeds to fund future growth under its capital investment programme.
This investment was part of a larger programme of fund raising by JISL under which JISL successfully raised total equity of USD120 Million (INR 8046 Million) from its Promoters and Mandala, as detailed below:
- A preferential issue and allotment of 14.1 Million Equity Warrants in JISL at a price of INR 80 per share subscribed by a private company of the Promoter Group, JAF Products Private Limited. The subscription proceeds of this issue, amounting to INR 1128 Million were received in full by JISL on 24th March, 2016;
- A preferential issue and allotment of 36.2 Million Compulsorily Convertible Debentures in JISL at a price of INR 80 per share subscribed by Mandala. The subscription proceeds of this issue, amounting to INR 2,896 Million were received in full by JISL on 11th March, 2016; and
- As described above, a preferential issue of Equity Shares and Compulsorily Convertible Debentures in JFFFL subscribed by Mandala in an amount of INR 4,022 Million on [30th March 2016].
Through this fund raising, JISL has successfully raised INR 8,046 Million, which will be applied mainly towards reduction of debt and growth of the food business. This fund raise will help JISL reduce its Net Debt at consolidated level by about INR 7750 Million, as at the end of March 2016.
Commenting on the fund raise, Mr. Anil Jain, Managing Director of JISL said, “We are happy to announce this investment in JFFFL by Mandala. The high intrinsic value accorded to our globally leading food business by this specialist agribusiness investor reflects the scale and vertical integration achieved by us over the years. Owing to the world class quality standards and global scale of its operations, the food business has demonstrated an extraordinary growth rate, a CAGR of around 25% between FY11 and FY15. This fund raise will allow us to further grow the business in existing and new categories of fresh and processed fruits, vegetables and allied products. The business has significant potential backed by our position as a leading supplier to global FMCG giants like Coca–Cola, Frito–Lay, Nestle, Unilever etc. and new initiatives like our recent launch of “Aamrus” into the retail consumer market under our umbrella brand, ” Jain FarmFresh “