Goldman Sachs plans to exit from its private equity investment in Punjab-based food major, Cremica. Goldman Sachs had acquired 10% stake in Cremica in 2006, valuing the company at Rs 500 crore. According to sources, a merchant banker has been appointed and PE majors such as ChrysCapital and Blue River Capital have shown interest in acquiring the stake.
The group, with a sales turnover of about Rs 150 crore, was established in 1978 by Rajni Bector. Cremica makes biscuits, condiments and sauces, and is also a major supplier to McDonald’s, Pizza Hut and Cafe Coffee Day.
When contacted, Surendra Khemka, CFO, Cremica said that he is unaware of the development. “As we are an unlisted entity, I’m unable to disclose the figures,” he said, refusing to give company’s sales figures. Muneesh Chawla, managing director, Blue River Capital-Blue River Capital India, said, “I cannot comment about this specific development at this stage as we are exploring a number of investment opportunities as of now.”
On the reason of Goldman’s exit, the investment banker said, “The exit has no connection with either the liquidity crisis or downturn of the sector. Goldman has a number of major investments across the sectors and this is just a minor investment. They have just decided to take a call.” “The food sector in India is performing well and PE players are keen on investments in food sector,” he added.
Goldman Sachs has invested about $1 billion in India in companies such as Mahindra & Mahindra Ltd (M&M), TVS Logistics, National Stock Exchange and Bharti Infratel Ltd, SpiceJet, NDTV and Sigma Electric Manufacturing Corp. However, as per current mark-to-market (MTM) value, value of Goldman’s investment has eroded 65% each in M&M and SpiceJet and 79% NDTV. According to a survey from SMC Capital, the private investment in public enterprises of 2008 have lost about 54% from their investment of $ 1.67 billion to $ 0.78 billion, a loss of $ 0.89 billion.