Darby Asia Mezzanine Fund invests in Coffee Day

MUMBAI/WASHINGTON: Darby Overseas Investments Ltd ("Darby"), the private equity arm of Franklin Templeton Investments, announced that its Darby Asia Mezzanine Fund II ("DAMF II") invested $25 million through an affiliate in Bangalore-based Amalgamated Bean Coffee Trading Company Ltd (popularly known as "Coffee Day").

Transaction details were not disclosed. Coffee Day is Darby's third investment in India in the last 12 months. Darby said the final equity commitments to the $300 million DAMF II were completed on October 31, 2007.

Investors include China Investment and Finance, a subsidiary of China CITIC Bank; Mizuho Corporate Bank; Franklin Templeton Investments, the Asian Development Bank, and two funds managed by AXA Private Equity.

Coffee Day is one of the largest integrated coffee players in India, with operations across the coffee value chain from procurement and processing to retailing. It owns and operates the largest number of coffee cafes in India under the brand "Cafe Coffee Day".

The funds will be deployed in expanding Coffee Day's presence across India and in parts of Europe.

Richard H. Frank, Darby's Chief Executive Officer, said, "Coffee Day has successfully consolidated its market leader status and is positioned to take further advantage of the ongoing macroeconomic, demographic and lifestyle changes. We are attracted to ABC because of its leadership position within India's rapidly expanding consumer lifestyle segment and its strong execution capabilities."

V G Siddhartha, Chairman of Amalgamated Bean Coffee, said of the investment, "We are pleased to have an experienced and prestigious investor such as Darby on board and look forward to a productive partnership."

Darby's first Asia mezzanine fund was launched in 1998 and became fully invested in 2004.

The firm has been a pioneer in providing mezzanine products, a hybrid of both debt and equity, to emerging market regions, including Latin America, Asia, and more recently Central and Eastern Europe.

In July 2006, Darby and Hana Bank, one of Korea's leading financial institutions, announced the closing of their jointly managed Korea Emerging Infrastructure Fund "KEIF," which raised KRW580 billion (approximately US$586 million), and is currently 30 per cent invested.

Darby Overseas Investments, Ltd was founded in 1994 by The Honorable Nicholas F Brady, who served as US Secretary of the Treasury between 1988 and 1993.

In 2003, Darby became a fully owned subsidiary of Franklin Resources Inc, a global investment management organization operating as Franklin Templeton Investments.

Franklin Templeton Institutional, a unit of Franklin Templeton Investments, provides global and domestic investment management solutions managed by the Franklin Global Advisers, Templeton, Franklin Templeton Fixed Income, Franklin Templeton Real Estate Advisors, Darby and Mutual Series investment management teams.

The San Mateo, California-based Company has 60 years of investment experience and over $600 billion in assets under management as of February 29, 2008.