Karuturi Global Ltd plans to raise $150mn through FCCBs and Debt equally. The company is raising $50 mn through FCCBs with a green shoe option of $25 mn by end of this month. $75mn will be raised via debt at Libor plus 400 points in the next 2 months.

The funds are being raised to finance expansion of its agriculture export business from its Ethiopia.

Karuturi Global has been allotted a little over 840,000 acres in Ethiopia to develop the agriculture land on which the company will grow cereals (maize, wheat, rice), fresh vegetables, palm oil and sugarcane

In 2007, the company had raised $75mn through FCCBs in 2 tranches of $25mn and $50mn to investors like Goldman Sachs, Credit Suisse, Morgan Stanley.

Transaction Reference: BS

Karuturi  Global is in the business of exporting roses and 95% of its revenues are contributed through this business. Each stem is sold in the range of 11-12 Euro cents,while its cost of production is around 7 Euro cents keeping a margin of around 60% on each rose stem. It produces around 555 million stems of cut roses.

The company has around 550 acres under roses which is being expanded by adding another 150 acres soon.

The company expects around Rs 80cr of revenues from the agriculture business during the present fiscal, the first year of the diversification. Karuturi Global has been into the business of cultivating gherkins which brought in revenues of Rs 15cr during last fiscal.

The promoter group holds around 52% in the company and post the dilution after five years, their stake is expected to come down to 46%. The company is promoted by K S Ramakrishna. In 2009, Anil Tumu retired from the promoter group. The company has debt of Rs 460cr including the FCCBs of Rs 345cr.

In 2007, Karuturi Global acquired 100% stake in Delhi's Estel Communications which is an ISP. In the same year, it also acquired a Kenya-based company called Sher Agencies Ltd for  €46mn.

Last month, Karuturi had announced that it was in talks with Standard Chartered'sPE arm and Reliance Capital to raise $100mn by diluting upto 10% stake in its subsidiary Karuturi Overseas Ltd. Karuturi Global has appointed Yes Bank as advisor. Karuturi Overseas is the holding company for the Karuturi Group's Africa operations.

According to commerce ministry data, flower exports went up to Rs 65.63cr during April-February 2008-09 compared with Rs 48.75cr in the previous fiscal.  The government has identified floriculture as a 'sunrise' industry and accorded it a 100% export oriented status.

More than 50% of around 300 floriculture units are based in Karnataka, Andhra Pradesh, Tamil Nadu. West Bengal, Maharashtra and Rajasthan also have large areas under floriculture. 

Karuturi Global