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Burger King India board approves acquisition of controlling stake in BK Indonesia; Stock under pressure

The company will acquire an 83.24% stake from existing shareholders of BK Indonesia at around USD 183 million.

December 17, 2021 10:54 IST | India Infoline News Service
The Board of Directors of Burger King India Limited, at its meeting held on December 15, 2021, approved the acquisition of a controlling stake in PT Sari Burger Indonesia (BK Indonesia).

The company will acquire an 83.24% stake from existing shareholders of BK Indonesia at an equity value arrived at by adjusting the enterprise value of IDR 2,601 billion equivalent to USD 183 million (on a cash-free and debt-free basis for 100% of the shares of BK Indonesia), for cash, debt, and debt-like adjustments, normalized working capital, any profit linked plans or profit-sharing arrangements with employees and partners and non-operating liabilities as agreed in the sale and purchase agreement to be executed by and amongst Company, QSR Indoburger Pte. Ltd. (QSR), PT Mitra Adiperkasa TBK (MAP), F&B Asia Ventures (Singapore) Pte. Ltd. and BK Indonesia (SPA), payable in one or more tranches, and on such terms and conditions as mentioned in the SPA.

Post the completion of acquisition of shares as above, the company shall make fresh capital infusion in BK Indonesia for an amount aggregating to IDR equivalent of USD 40 million by way of subscription to fresh shares issued by BK Indonesia, towards supporting any of its future business requirements, business expansion plans and acquisition of any other business/asset/brand.

The company stock was under selling pressure amid the bearish markets on Friday. At around 10.57 am, Burger King India Limited was trading at Rs149.10 -per piece down Rs4.20 or 2.74% on the BSE.

In addition, there shall be a further capital infusion by the Company in BK Indonesia by way of subscription to fresh shares issued by BK Indonesia, towards settlement of any debt and debt like adjustments, for such amount to be determined on closing in accordance with the terms of the SPA and on such terms and conditions as agreed in the SSHA (as defined below).

Accordingly, the company on December 16, 2021 entered into:
  • SPA to acquire 83.24% stake from existing shareholders of BK Indonesia (by way of purchase of 332,876 equity shares from QSR and 83,920 equity shares from MAP), as mentioned above; and
  • Share Subscription cum Shareholders’ Agreement by and amongst the Company, MAP and BK Indonesia (“SSHA”) in relation to the rights and obligations of the Company and MAP in relation to the governance, management and operation of BK Indonesia, including the capital infusion as referred to above.
“The completion of the aforesaid transactions is subject to fulfilment of certain conditions precedent including the receipt of the approval of the shareholders of the Company and such other approvals and consents (including from the lenders and the franchisor) as may be required,” company said in a filing on Thursday.

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