Devyani International Approves ~₹3,473 Mn Investment in Thai Subsidiary
Devyani International will invest ~₹3,473 Mn in its Thai subsidiary, Restaurants Development Co., Ltd. (RD), through its subsidiary DID. RD will use funds to retire THB 810 Mn debt and for working capital/capex. DID will raise THB 400 Mn convertible loan from Devyani International and THB 810 Mn from Axis Bank, secured by a corporate guarantee.
The investment and corporate guarantee involve significant amounts and impact the subsidiary's financial structure, but are within the scope of existing business operations and strategic investments.
The investment strengthens the balance sheet and funds the long-term business requirements of the subsidiary, indicating positive future growth prospects.
Devyani International Limited (DEVYANI) announced that its Investment and Borrowing Committee has principally approved an investment of approximately THB 1,210 Mn (equivalent to ~₹3,473 Mn) in its step-down subsidiary, Restaurants Development Co., Ltd. (RD), operating a chain of 274 KFC restaurants in Thailand. This investment will be made through its subsidiary, Devyani International DMCC (DID), and Yellow Palm Co., Ltd. (Yellow).
The funds will be used by RD to partially retire a debt of THB 810 Mn (~₹2,325 Mn) owed to DID and to fund its working capital and capital expenditure requirements. The net investment by the Group amounts to approximately THB 400 Mn (~₹1,148 Mn).
To facilitate this, DID will raise a convertible loan of ~THB 400 Mn (~₹1,148 Mn) from Devyani International Limited and a short-term loan of ~THB 810 Mn (~₹2,325 Mn) from Axis Bank Limited, Dubai. This short-term loan will be secured by a corporate guarantee from Devyani International Limited.
The investment in DID by Devyani International Limited is a related party transaction, with the proposed investment being at arm's length. Similarly, investments by DID and Yellow in RD are also considered related party transactions and are at arm's length.
The acquisition of controlling interest in RD and its holding companies was initially informed on December 18, 2023, and January 17, 2024. The expected completion for these investments is by June 30, 2026. RD reported a turnover of THB 6.13 Bn for FY 2025. Following the investment, RD will continue as a subsidiary of DID and Devyani International Limited, and a subsidiary of Yellow and Devyani International Limited, respectively. The corporate guarantee provided to Axis Bank will be treated as a contingent liability.
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