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SP Group looks at listing or stake-sale of Eureka Forbes

A profit-making company, Eureka Forbes clocked revenues of Rs 2,388 crore in fiscal 2019.

, TOI.in|
Nov 20, 2019, 11.28 AM IST
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he Shapoor Mistry-led enterprise plans to list or sell a stake in Eureka Forbes as part of a debt-trimming exercise.
Shapoorji Pallonji (SP) Group is evaluating “value-unlocking options” for Eureka Forbes. The move comes 18 years after the construction giant acquired the consumer durables company from the Tata Group. The Shapoor Mistry-led enterprise plans to list or sell a stake in Eureka Forbes as part of a debt-trimming exercise. The development follows recent plans by the SP Group to seek more time to pay dues it owes its arm, Sterling and Wilson Solar.

Eureka Forbes is 100 per cent owned by the publicly listed Forbes & Co, one of the oldest running companies in the world. The construction major didn’t spell out details about the stake-sale in Eureka Forbes.

But it said it has authorised the management to evaluate a scheme of arrangement and other appropriate mechanisms to enable an eventual listing of the company. The management will explore “listing, dilution/sale or a combination of both” for Eureka Forbes, the group said.

If Eureka Forbes taps the primary market this fiscal, then it will be the second company from the SP Group stable to go for an initial public offering after Sterling. If the group decides to sell Eureka Forbes, then strategic players and private equity investors could be potential bidders. Besides the brands, distribution and service networks, a possible buyer would gain from Eureka Forbes’s ready customer base of over 19 million people.

Eureka Forbes, also known as one of the world’s largest direct sales companies, was set up in 1982 as a joint venture between Forbes & Co and Sweden’s Electrolux.

After the Tatas sold Forbes & Co to SP Group in 2001, the latter subsequently bought out Electrolux’s 40 per cent stake in the joint venture. Electrolux exited Eureka Forbes as it had already got out of the direct marketing business globally.

A profit-making company, Eureka Forbes clocked revenues of Rs 2,388 crore in fiscal 2019.


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