Soros equity fund to exit 3 unlisted firms

Indocean Ventures of Mauritius, the Soros group-promoted private equity fund, has decided to divest its stake in three unlisted firms, Mahaan Proteins, media firm CMM and Datre Corporation, to strategic investors.

The private equity fund, which was managed in India by Pradeep Shah till 1997, has sought enquiries from strategic investors for divesting its stake. The exact reason for the possible exit from these firms is not known.

Senior company executives in Singapore did not respond to a faxed questionnaire.

The fund has already put out an advertisement seeking bids to sell the stake in these three companies.

The decision to divest shares in these firms comes at a time when several private equity funds are adopting a cautious approach about making fresh investments in India.

This is mainly due to the lack of a proper exit option owing to the depressed primary market conditions.

Indocean Ventures and group firms also held stakes in big companies such as HDFC Bank, Gujarat Glass and the Pradeep Kar-promoted Planetasia.

The fund had an initial  corpus of $60 million when it was launched in 1994-95, sources familiar with the development said.

Indocean Ventures hold 47.14 per cent in Mahaan Proteins (formerly known as Lacto Protein India), a Delhi-based food processing company, while its stake in CMM, an audio-visual media post production firm based in Mumbai, is 19.13 per cent.

The equity holding of Indocean Ventures in Datre Corporation (formerly known as Delta Corporation), an industrial valves manufacturer based in West Bengal, is 32 per cent, while the rest is owned by the Kanoria group.

The valve-making capacity of the Datre unit, which is located at Falta is 9,000 tonne per year foundry.

The project was financed by the Industrial Development Bank of India with a term loan of Rs 25 crore (Rs 250 million). The paid up capital of Mahaan Proteins, CMM and Datre stand at Rs 9.24 crore(Rs 92.4 million), Rs 2.13 crore (Rs 21.3 million)and Rs 3.85 crore (Rs 38.5 million), respectively.

Sale of the equity shares will be subject to various terms and conditions including the provisions of existing agreements relating to the equity shares, negotiation and execution of sale/purchase agreements.

The investment was made through Indocean Ventures and Indocean Investment (Mauritius).

In addition to the three companies, Indocean Ventures is believed to have invested $2 million in the Chennai-based Spartek Ceramics, part of the Ceramics group that is undergoing a major restructuring.