Future Supply Chain, the logistics arm of Kishore Biyani-led Future Group, will now have a prominent global logistics firm as its equity partner. The company has announced coming to an agreement with Nippon Express, Japan’s leading global logistics player, to acquire a 22% stake in Future Supply Chain Solutions Ltd (FSC). This transaction is a combination of primary issuance and secondary purchase from an existing Investor.
As part of this transaction, FSC will issue 37,89,350 shares to Nippon Express at a price of Rs 664 per share (22% premium to the current market price). Through this primary issue Nippon Express will hold 8.6% stake on a fully diluted basis and FSC will raise around Rs 252 crores for funding its near-term growth plans.
Further, Nippon Express has informed FSC that they have entered into a share purchase agreement with institutional shareholder(s) of FSC to acquire 58,63,475 shares representing 14.6% of existing share capital. Both these transactions will result in Nippon Express owning a 22% stake in FSC (on a post money, fully diluted basis).
FSC plans to leverage Nippon Express’ Japanese and MNC clients for exploring new business opportunities in India, especially for 3PL and express logistics operations. Nippon Express will also have representation on FSC’s Board of Directors, which will further strengthen its Board through their strategic direction.
Commenting on this transaction, Mayur Toshniwal, Managing Director, FSC said, “Through this partnership, Nippon Express and FSC are well poised to derive significant synergies given their complementary skill sets and services offering, and gain a deeper foothold in the large and growing Indian logistics sector.”
FSC has convened an Extraordinary General Meeting on October 19th 2019 at Mumbai for obtaining the shareholder approval.