GIC to invest $387m in Indonesian retailer

Trans Retail has hypermarkets, supermarkets and cash and carry stores under the Carrefour and Transmart brands. The Carrefour business was run as a joint venture until 2012 when Trans Retail acquired a 60% stake for $672 million, giving CT Corp. full ownership. According to the Carrefour Indonesia website, there are 87 outlets nationwide.

With GIC's support, Trans Retail will expand its store footprint and work towards becoming a leading multi-format retailer. Amit Kunal, head of the Southeast Asia direct investments group at GIC, said in a statement that the deal reflected the sovereign wealth fund's confidence in Indonesia's long-term growth potential.

It is also another example of a local conglomerate turning to private capital providers in the wake of weak public markets - curbing companies' scope to raise debt - and less aggressive lending by the country's banks. Last December, Salim Group received $1 billion from Northstar Group, TPG Capital and Gateway Management through a structured transaction.

It is unclear what form the GIC investment has taken, but due to restrictions on direct foreign ownership in certain consumer-facing industries, a preferred structure has been bonds that convert to equity on listing. The Northstar-led financing for Salim was secured against shares in Hong Kong-listed First Pacific and Indomaret, Indonesia's largest convenience store operator. The latter is expected to pursue an IPO.

Private equity firms have previously done well in the retail sector, including Northstar through its investment in convenience store chain Alfamart and CVC Capital Partners with listed operator Matahari Department Store.

Founded in 1987, CT Corp has interests spanning financial services, media and entertainment and agribusiness as well as consumer. Its founder and principal shareholder is Chairul Tanjung, who ranks fifth in the 2015 Forbes Indonesia rich list with a net worth of $4.8 billion.

Other retail-related assets include the Indonesia franchises for The Coffee Bean & Tea Leaf, Baskin Robbins and Wendy's, the Metro department store, and Trans Fashion, which operates nearly 100 boutique fashion stores.

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• Topics
• Southeast Asia
• Consumer
• Expansion
• GIC Private
• Indonesia
• Southeast Asia
• Growth capital
• Consumer