Express distribution and supply chain solutions firm Gati Ltd, which reported widening of its consolidated loss at Rs 173.40 crore in the March quarter, on Wednesday said it is exiting from its cold chain solutions business -- Gati Kausar India.
Gati will sell its approximately 70 percent stake in Gati Kausar India to existing minority shareholder Mandala Capital AG Limited, a leading private equity firm focused on investments across the food value chain, the company said in a statement.
Mandala, which currently holds about 30 percent, has been a shareholder in Gati Kausar since 2014, the company said.
Following the closure of this transaction, which is expected within the next 30 days, Mandala will become the controlling shareholder in Gati Kausar, the statement said.
Meanwhile, the Allcargo group firm, in a regulatory filing, said its consolidated loss widened to Rs 173.40 crore in Q4FY 21, impacted by exceptional higher expense of Rs 172.87 crore.
The company had reported a loss of Rs 70.60 crore in the corresponding period a year ago.
Revenue from operations grew by 9.88 percent in the quarter under review to Rs 406.64 crore, from Rs 370.09 crore in the year-ago period, as per the filing.
In the quarter ended March 31, 2021, Gati Ltd reported a total exceptional expense of Rs 172.87 crore. The company reported diminution amounting to Rs 171.03 crore in the present fair value of the assets sold during the year and proposed to be sold, the filing added.
Following the exit from its cold chain solutions business and post the closure of the transaction, Gati's consolidated gross debt will come down by around Rs 100 crore.
With this, Gati would have reduced its consolidated gross debt by more than 50 percent over the last 12 months, the statement said.
The company said since its acquisition by Allcargo group last year, it has been on a continuous transformation journey to focus on asset-light, high-return on equity businesses.
Gati has sold or closed down four non-core businesses over the last year, so as to focus entirely on the express distribution and e-commerce businesses and regain market leadership position, the company said.