Gati to look for joint venture partners to lower debt

MUMBAI: Gati will scout for joint venture partners for its subsidiaries, including cold chain and international business, to lower debt, once it finds a partner for its loss-making shipping business.

“At the moment we are looking to bring a partner for our shipping business. We will then re-look at our cold chain and international business among others and decide on bringing a joint venture partner in those businesses. The idea is to help us reduce our debt,” said Mahendra Agarwal, MD, Gati.

Gati had in February signed a deal with Kintetsu to form a joint venture, Gati Kintetsu Express, in which Gati will hold 70% stake while Kintetsu will hold the remaining stake. Accordingly, through a business transfer agreement, the express distribution and supply chain business of Gati will be transferred to the new entity.

The Mahendra Aggarwal-led company has been reeling under mounting debt and currently has more than Rs470 crore as consolidated debt and had been actively looking to reduce its debt burden through capital infusion from private equity firms in the past.

Gati’s cold chain supply business currently has more than 150 refrigerated vehicles and transport more than 75,000 tonnes annually, while its international business is engaged in freight forwarding and inland transportation.