Jayaram Banan buys back 77% stake in Sagar Ratna
NEW DELHI: Sagar Ratna’s founder Jayaram Banan has bought back controlling stake in the south Indian cuisine restaurant chain from India Equity Partners (IEP) for an undisclosed amount.
On Monday, Banan said he has bought back the 77% stake he had sold to the PE (private equity) firm in 2011. At that time, Banan had retained 22.7% stake.
The acquisition was carried out by his flagship company, Ocean Pearl Hotels, Banan said. He, however, declined to give the financial details of the transaction.
“We plan to float an IPO (initial public offering) in five years’ time. The immediate priority is to scale up the brand and aggressively expand by adding a hundred stores over the next three years,” said Roshan Banan, the company’s managing director who is Jayaram Banan’s son.
Sagar Ratna, founded in 1986, operates 88 stores. Over 50 of these are franchise-operated. Jayaram Banan said the future stores in tier-1cities would be company-owned, while franchisee partners would be roped in for stores in tier-2 and tier-3 markets.
Jayaram Banan and IEP had been involved in legal disputes over governance and quality issues. IEP had acquired a controlling stake in the chain for about .`180 crores, but mounting losses and disputes had brought down the brand’s valuation significantly.
At that time of the acquisition, IEP had set up a special purpose vehicle to run the restaurants. Last year, IEP had put its equity stake in Sagar Ratna on the block, but people in the know said IEP’s stake found limited takers at its asking price.
Sagar Ratna executives said some litigations between the two parties remain unresolved.