SP had appointed Standard Chartered Bank to explore strategic options for Eureka Forbes, which is being spun off from publicly listed Forbes & Co. Demerger approval is pending National Company Law Tribunal. The consumer appliances unit will then be sold to Advent. When contacted, both Advent and SP did not comment.
The transaction will help SP reduce its total debt of Rs 20,000 crore and focus on its core construction business. Out of the total debt, about Rs 12,000 crore is under the Kovid Relief Scheme of the Reserve Bank of India. The scheme gives SPs till 2023 to clear the dues, but plans to pay at least half of it in the coming months. And the disinvestment of Eureka Forbes is headed in that direction. Besides Eureka Forbes, SP is looking to sell Sterling & Wilson Solar, Afcons Infrastructure and some real estate properties.
Advent was competing with the investment firm warburg pincus and Swedish home appliance maker Electrolux acquired Eureka Forbes. The two refused to extend their offers, paving the way for an imminent deal with Arrival. Interestingly, Eureka was promoted by Forbes, one of the largest direct selling companies in the world, Electrolux. Tata Group in the early 1980s. The Swedish major pulled out of the joint venture as it exited the direct marketing business in several countries.
Advent’s move comes after it exited home appliance maker Crompton Greaves Consumer Electricals. The Boston-based fund has been investing in India since 2007. At this time, it has deployed more than $1.7 billion across a dozen Indian companies, according to its February 7 statement.
Eureka Forbes, with a footprint in more than 35 countries, has 20 million subscribers. A few years ago, it acquired Switzerland’s Lux, helping Eureka Forbes spread its wings to overseas locations. It is a leader in the vacuum-cleaning category in India and its flagship brand Aquaguard also has a major share of the water purifier market in the country. Riding on the cleanliness and health wave on the back of the pandemic, it was recently launched Forbes CoronaGuard, a virus disinfectant device, and a robotic vacuum cleaner.
.