Devyani International (DIL) has approved a strategic investment of approximately ~THB 1,210 Mn (~INR 3,473 Mn) into its Thailand-based subsidiary, Restaurants Development Co., Ltd. (RD), operating 274 KFC outlets. The funding, provided via its Dubai subsidiary (DID) and Yellow Palm Co., Ltd., aims to retire existing debt and support working capital/capex. DIL will extend a convertible loan of ~THB 400 Mn (~INR 1,148 Mn) to DID to facilitate this capital restructuring, expected to conclude by June 30, 2026.
Strategic Investment in Thailand Operations
Devyani International Limited (DIL) announced key financial restructuring and investment approvals concerning its overseas Quick Service Restaurant (QSR) business in Thailand. The move centers on bolstering the balance sheet of Restaurants Development Co., Ltd. (RD), which operates a chain of 274 KFC restaurants as of September 2023.
Capital Infusion Details
The Investment and Borrowing Committee, based on committee recommendations, has principally approved a total investment of ~ THB 1,210 Mn (~INR 3,473 Mn) into RD, channeled through DIL’s Dubai subsidiary, Devyani International DMCC (“DID”), and Yellow Palm Co., Ltd. (“Yellow”).
- This total investment will be utilized partially to retire RD’s existing debt of ~ THB 810 Mn (~INR 2,325 Mn) owed to DID.
- The remainder will fund RD’s working capital and capital expenditure (capex) requirements.
- The net investment by the Group totals approximately ~ THB 400 Mn (~INR 1,148 Mn).
Funding Mechanism for DID
To finance its portion of the investment, DIL’s subsidiary DID will raise funds internally. DID will secure a convertible loan of ~ THB 400 Mn (~INR 1,148 Mn) from the parent Company (DIL) at an interest rate of 8.30% p.a., which is expected to convert into equity, resulting in DID holding approximately ~56.8% shareholding post-conversion.
Additionally, DID will secure a short-term loan of ~ THB 810 Mn (~INR 2,325 Mn) from Axis Bank Limited, Dubai. DIL will provide a corporate guarantee for this short-term loan, which will be treated as a contingent liability.
Investment Structure in RD
Following the capital deployment, the shareholding in RD will be finalized:
- DID’s shareholding in RD will stand at 49.00%.
- Yellow Palm Co., Ltd.’s shareholding in RD will stand at 51.00%.
The overall transaction, covering the investments by DID and Yellow into RD, is expected to be completed by June 30, 2026. The structure is deemed to be conducted at “arm’s length”, with no promoter or group companies having direct interest in the parties being acquired (DID and Yellow).
Source: BSE
