Priyanka Tiwari
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The year long possible mergers and acquisitions have come to a close with KKR - Avendus Capital. Demanding more than 6000 crores. Mizuho has managed to outdo other known competitors by taking Nomura Holdings and Carlyle head on to secure competitive for Avendus Capital.
According to highly placed sources, KKR and Mizuho have reached Mizuho’s milestone in which they wrestled with strategic deals. They are now working towards competing grab KKR as the main head. While the finalized agreements of the deal are still unclear, term resolution is well underway.
Deepak serves as the company’s CEO whereas Vohra and Aggarwal make up the remaining shares alongside 3 other stakeholders. Currently Deepak holds the highest stake of approximately 7 percent while the others hold 5.
The sale showed obstacles with some of the key investors including KKR opting out from wanting to make the purchase. Deepak was one of these key players. He is also known to not venture towards strategic sales which makes his exit considering Mizuho's entrance very interesting.
The sources indicate that the negotiations around the agreement’s details, such as how the initial owners of the company would carry on and what their function would be after the acquisition, are still open to review.
“It is highly probable that if a promoter leaves the company after the deal, they might still be subjected to a hand-over clause for a period of 12 to 24 months. Mizuho, like KKR, may also choose to implement certain non-competition restrictions for other senior managers, particularly the formerly revolving Avendus promoters if they decide to exit the company,” said one of the sources mentioned above.
Sources say that although the final binding bids were submitted by mid-January and conditions concerning valuations and other issues became clear by early February, it is these minutiae promoter-centric conversations that are stalling the deal’s completion.
“It has now gone on for so long that KKR must commence the transaction and has to stop delaying the bidders,” said an unnamed banker.
Another source, however, stated that the battle for Avendus Capital can be ongoing and that Mizuho is not the only option.
Responding a deal query and the role of promoters, one of the Avendus Capital representatives replied through an email saying, “Your quarry is devoid of any truth. We categorically deny the claims made by your. They have no basis in reality.”
KKR’s spokespeople did not provide any comment. Mizuho did not reply the emailed questions until the article was published.
In 2015, KKR purchased a little over a sub-majority ownership stake, about 60 percent, in Avendus. PE firm has divested the company as of last year, that US headquartered company decided to exit.
In Gaja Capital, and Yogesh Mahansaria, the founder and CEO of Alliance Tire Group, who hold on the company for sale provided six to seven percent together rest may go exit from the company along with KKR. The company’s original shareholders retain the remaining shares.
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