The Shapoorji Pallonji (SP) Group has restarted the sale process of home hygiene products maker Eureka Forbes Ltd, two people aware of the development said.
The cash-strapped group has begun talks with potential buyers, including private equity funds and a well-known consumer appliances company, the people cited above said on condition of anonymity. The SP Group initiated talks to sell the company popular for its vacuum cleaners and water purifiers last year but had suspended the process mid-way.
“Eureka Forbes is one of the best-known consumer brands in India, and the SP Group was evaluating other structures to monetise the asset without divesting ownership,” said one of the two people cited above. “As part of this, they were engaged with a large Canadian fund to raise debt by pledging the cash flows of Eureka Forbes as collateral,” this person added.
“The transaction (with the Canadian fund) was part of SP Group’s plans to pledge part of its stake in Tata Sons Ltd to raise debt,” said the second person. “But with the deal running into trouble after Tata Sons objected to the transaction and the matter sub judice, the SP Group has decided to exit Eureka Forbes altogether and is seeking an enterprise valuation of around ₹7,000 crore”. The company did not respond to a request for comment.
A subsidiary of SP Group company Forbes and Co. Ltd, Eureka Forbes has an annual sales of close to ₹3,000 crore. Its product portfolio includes water purification, vacuum cleaning, air purification and home security solutions. The company says it has 20 million customers, reaching over 1,500 cities and towns in India, and 53 countries.
The Shapoorji Pallonji Group has been under considerable financial strain for a while. In September, it missed a deadline to repay dues to group company Sterling and Wilson Solar Ltd, raising doubts about the group’s ability to service its debt amid a faltering fundraising plan.