Black River Asset Management, the private equity arm of agribusiness giant Cargill, will invest $45 million in India’s Future Consumer Enterprise Ltd (FCEL), the food and consumer goods unit of Future Group, according to VC Circle.

 

Asian Venture Capital Journal reports that the wholly-owned subsidiary of Black River’s Food Fund 2 will invest through compulsory convertible debentures (CCDs) that are required to convert to equity shares within 18 months.  The company plans to use the raised funds to finance its expansion plans and business growth initiatives, while also using it to improve its balance sheet through improving the maturation of its existing debt.

 

Prior to this investment, Black River, which mainly invests between $25 million and $50 million per investment in food businesses in emerging economies, has made two investments within India – the first in Delhi-based Bakers Circle India Pvt Ltd., and the second in Hyderabad-based Dodla Dairies.

 

FCEL has also entered into an agreement to make Future Retail Ltd. (FRL) the master franchisee for its network of convenience stores, which includes KB’s Fairprice, Big Apple, Conveniently Yours, and Aadhaar – a rural wholesale distribution unit.  

 

In addition, the company plans to raise another $10 million from promoters and/or promoter groups though the preferential allotment of convertible warrants, which will convert to equity shares within 18 months from the date of allotment.

 

FCEL has also announced it is considering establishing a strategic partnership with Black River Food Fund 2 LP to explore possible expansion into upstream activities in the food and related sectors, reports Deal Street Asia.