Varun Beverages invests ₹413 crore in South African subsidiary for debt repayment and growth

Varun Beverages Ltd on Thursday (January 2) announced an investment of ₹413 crore by subscribing to 1,984,695 ordinary shares in its South African subsidiary, The Beverage Company Proprietary Ltd (Bevco), at a price of ZAR 453.47 per share.

"We would like to inform you that Varun Beverages Limited ("Company") today (at 03:00 P.M.) invested INR 4,128.04 million by subscribing ordinary shares of its subsidiary company i.e. The Beverage Company Proprietary Limited, South Africa," Varun Beverages said in a regulatory filing.

This acquisition results in an incremental shareholding of 2.42% in Bevco. The investment aims to assist Bevco in repaying its existing debt and strengthening its balance sheet for future business growth.

Bevco is engaged in the manufacturing and distribution of licensed PepsiCo-branded and own-branded non-alcoholic beverages in South Africa, Lesotho, and Eswatini.

In the financial year ending June 30, 2024, Bevco reported a consolidated turnover of ZAR 4,090 million. The transaction is considered a related-party transaction since Bevco is already a subsidiary of Varun Beverages. However, the shares were allotted at arm’s length.

There is no involvement of the promoter or promoter group in the transaction beyond their ownership stake in the company. Shares of Varun Beverages Ltd ended at ₹648.00, down by ₹2.55, or 0.39% on the BSE.