Dubai-based agriculture and food company Phoenix Group will invest in debt-laden Kenya operations of rose exporter Karuturi Global Ltd.
The investment is in the form of debt and equity, according to a stock-exchange disclosure.
The value of the investment is not disclosed.
The investment is expected to help Karuturi meet debt obligations and restart its operations following the conclusion of a four-year-long receivership in Kenya, the statement said.
Receivership is a type of corporate bankruptcy wherein a receiver is appointed to run a company.
“The investment into Karuturi was a part of the firm’s expansion plan for the farming business. This investment is timely and adds floriculture and Kenya to our growing basket,” said Gaurav Dhawan, executive chairman of Phoenix Group.
“We are excited to contribute to the revival of Karuturi, enabling 2,200 employees to come back to work. We await certain clarifications from the court to initiate the process,” Dhawan said.
“On 19 January 2018, the High Court of Kenya ruled in favour of closure of the dispute between the two parties based on a compromise affidavit. Karuturi was obligated to pay the court the approved amount and redeem the farm in next 90 days,” said Ram Karuturi, chief executive officer of Karuturi Global.
Pheonix Group’s investment will help the firm repay debts as obligated by the high court in a week or less, he said.
Karuturi Global has land holdings measuring 500 acres at Naivasha in Kenya.
It is one of the largest producers of cut roses in the world. The firm has operations in India, Ethiopia and Kenya. Its other business interests include food processing, floriculture retailing and information technology.
The company’s consolidated net sales stood at Rs 226.13 crore in the year through March 2017. Its net profit was Rs 90.57 crore.
Phoenix Group is an agri-food and resources enterprise. It is engaged in the food value chain ranging from production to retail distribution. Its key products are rice, pulses, specialty crops, sugar and wheat.
Its farming activities are spread across six countries over an area of 1,50,000 hectares with a focus on grains, oil seeds, fresh fruit, and vegetables, according to its website.
Its group firm Phoenix Resources is involved in distributing coal and iron ore.
Last November, Phoenix Group raised $205 million in debt from a consortium of financial institutions to expand its rice business in India, Asia and Africa.
