BlackRock could pour ₹500 cr into Bira91's promoter group

American asset management fund BlackRock is in advanced talks to invest '500 crore in the promoter group of B9 Beverages, maker of Bira91 craft beers, through structured debt, according to multiple people directly aware of the negotiations.

The funds-to be infused in holding companies controlled by B9 Beverages promoter Ankur Jain-will be used to acquire early shareholders such as Peak XV Partners and Sofina's holdings and to infuse new capital into B9 Beverages, one of the executives said.

The development comes amid liquidity woes, losses and supply disruptions, which the company has attributed to its name change that triggered a regulatory hurdle and led to inventory losses. The company reported '748-crore net loss in FY24 while its revenue declined to '638 crore from '927 crore in FY23. Its volume sales fell to 6-7 million cases in FY24 from 9 million cases in the previous fiscal.

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Besides '500-crore debt from BlackRock, B9 is also launching a '100-crore rights issue on May 22, which is expected to close in June, one of the executives cited above said.

"B9 and its founders are in the process of raising $100 million in aggregate from a set of investors and family offices," Jain told ET in an email reply. "The capital will be infused as primary capital in the company and part of it would be deployed by the founders to buy out early-stage investors."

He declined to divulge further details.

An email seeking comments from BlackRock remained unanswered.

The world's largest asset manager owns an equity stake of a little under 8% in Molson Coors, the world's fourth largest brewer that owns popular American beer brands Miller Lite, Coors Lite and Blue Moon Belgian White. It also owns a stake in Treasury Wine Estates, a prominent Australian wine company that owns 70 brands which are marketed globally.

"B9 Beverages has a term sheet for about $100 million to be split into two tranches. So, some part of the funds could come in the first tranche and the remainder in the second tranche," said one of the executives cited above. "There's a plan to restructure some of the obligations and make the company operationally more efficient."

B9 has created a long-term brand with Bira at a time when it's difficult to build a national beer brand. "So, that's the conviction investors have behind backing the company," he said.

BlackRock's funding is expected to be in the form of a debt instrument with a back-ended coupon to incentivise the borrower to meet certain conditions, such as operational targets of revenue and Ebitda goals of B9 Beverages.

At the end of the tenure of the debt funding, B9’s promoters would have to pay less interest on the debt if these targets are met, the executive said.

Overall, B9 Beverages and its promoters are in final stages of raising Rs 850 crore, of which a little over Rs 500 crore is being raised from BlackRock, and Rs 300 crore is being raised directly in the company through existing investors (Indian family offices and domestic funds) by way of a rights issue and private placement.

“The funds are being utilised by B9 Beverages partially to acquire early shareholders Peak XV Partners (formerly Sequoia Capital India) and Sofina's shareholding, and to infuse new capital in B9 Beverages,” the person cited above said.

As of March this year, Jain and his family and Japanese beverages firm Kirin held 20% each in B9 Beverages. Peak XV’s existing shareholding is 14% and Sofina’s is 6%.