February 8: Khetan Group is preparing to end its partnership with Danish beer producer Carlsberg. If Carlsberg of Denmark accepts the proposal of Khetan Group to leave the partnership, then Khetan Group will receive around Rs 100 billion. However, Carlsberg is yet to accept Khetan Group's proposal. If Carlsberg agrees to Khetan Group's proposal, it will be Nepal's biggest ever purchase and sale deal.
Khetan Group proposed to sell the shares of Carlsberg and the holding company (Carlsberg South Asia Pvt. Ltd.) for USD 744 million (about Rs 98.20 billion according to the exchange rate on Wednesday) and exit. This holding company based in Singapore looks after 100 percent of Carlsberg's business in India and 90 percent in Nepal.
One of the main investors of Carlsberg South Asia Pvt Ltd is CP Khetan, brother of industrialist Rajendra Khetan. As per the partnership deal, 66.7 percent share ownership is with Carlsberg Group and 33.3 percent with Khetan Group. According to Carlsberg, Khetan Group gave a formal notice to sell all the shares it has. Carlsberg mentioned in its report that Khetan Group will sell 33.3 percent of its shares to Denmark's Carlsberg Group for USD 744 million.
Gorkha Brewery, owned by Carlsberg, Khetan Group and other Nepali businessmen produces Carlsberg, Tuborg, San Miguel and Gorkha beer. Carlsberg also informed that the share purchase process has proceeded according to Khetan Group's proposal.
There was a serious dispute between Khetan Group and Carlsberg for some time. Carlsberg accused Khetan Group of violating the partnership agreement and good governance. A lawsuit was pending in Singapore between the two parties to settle the dispute. During the hearing of the case, the court had decided that Khetan Group can exit. Carlsberg was ordered to work on purchase option (call option) and Khetan Group to work on sale option (put option).
Along with the order, both parties appointed international evaluators separately. The average value of the valuations done by those appraisers was fixed at USD 744 million.
Khetan Group submitted a formal proposal on Monday to sell its shares at the same average price. Ten percent ownership of Gorkha Brewery is with other businessmen of Nepal while Rajendra Khetan has 9.95 percent share. The remaining 0.5 percent investment belongs to Dibya Mani Rajbhandari and Kamal Bikram Singh.