India's Crompton Greaves sells offshore assets for $126m
India-based electrical equipment manufacturer Crompton Greaves has agreed to sell its offshore businesses to US-based PE firm First Reserve International for EUR115 million ($126 million).
The sale includes the European, North American and Indonesian divisions of the company's transmission and distribution business, according to a market filing. The deal is subject to regulatory and shareholder approval and the negotiation of a binding letter of offer.
Crompton Greaves plans to use the proceeds from the sale to pay down its debt; it also hopes the divestment of the offshore divisions will enable it to function on its Indian businesses. The company is seeking opportunities to monetize its other international businesses.
Avantha Group, the promoter of Crompton Greaves, has been consolidating its operations over the last two years in an effort to reduce its debt and focus on its core business. Last year the company sold a 34% stake in Crompton Greaves' consumer products unit to Advent International and Temasek Holdings, which plan to purchase the rest once they have completed their acquisition.
Avantha's efforts have been supported by PE investment as well. In 2013, Aion Capital Partners and Apollo Global Management invested INR9.6 billion ($157 million) in the company. A few months later, KKR agreed to provide $100 million in long-term financing to Avantha to help it pay down debt and maintain its businesses. The capital came from the firm's domestic non-banking finance company, KKR India Financial Services.
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