Aamer Shahab, Hong Kong
Deepa Sankaran, Mumbai
91-22-6751-9100 Nigel Adam, Washington, DC
Mumbai and Washington, DC, March 26, 2007 - Darby Overseas Investments, Ltd. ("Darby"), the private equity arm of Franklin Templeton Investments and a leading provider of private equity and mezzanine capital in emerging markets, announced that its Darby Asia Mezzanine Fund II ("DAMF II") committed 750 million Indian Rupees (approximately US$17 million) through an affiliate to invest in Faridabad based Escorts Construction Equipment Ltd. ("ECEL"). Transaction details were not disclosed.
ECEL is the leading Indian material handling equipment manufacturer and is a market leader in pick-and-carry cranes. ECEL is a wholly owned subsidiary of Escorts, one of India's leading engineering conglomerates. ECEL was incorporated in 1995 following a spinoff from its parent, Escorts Limited, under which ECEL operated as a division manufacturing cranes.
Richard H. Frank, Darby's chief executive officer, commented: "We were attracted to ECEL because of its pole position within India's rapidly expanding construction equipment sector. In addition, ECEL fits well into our investment strategy of supplying risk capital to medium-sized companies with high quality management and good growth prospects."
Mr. Rajan Nanda, Chairman of ECEL, said of the investment: "Mezzanine finance is an attractive source of long-term capital for us as we pursue our plans for growth and an increased share of the overall market. We are very pleased to take advantage of Darby's broad experience in mezzanine financing for companies such as ours."
ECEL is DAMF II's third investment to date. Its first, announced last November, was financing for Shayne International Holdings Limited, a leading furniture maker and exporter based in Hangzhou, China. The second was an equity investment in AUPU Group Holding Company, a leading bathroom appliance maker, also based in Hangzhou, China.
Darby's first Asia mezzanine fund was launched in 1998 and became fully invested in 2004 after investing US$275 million. The firm has played a pioneering role in bringing mezzanine – a hybrid of both debt and equity – to emerging market regions, initially in Latin America and Asia, and more recently in 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 (US$610 million).
Darby Overseas Investments was founded in 1994 by The Honorable Nicholas F. Brady, who served as U.S. Secretary of the Treasury between 1988 and 1993. In 2003 Darby became a wholly owned subsidiary of Franklin Resources, Inc. [NYSE:BEN], a global investment management organization operating as Franklin Templeton Investments. Franklin Templeton Investments provides global and domestic investment management solutions managed by its Franklin, Templeton, Mutual Series, Fiduciary Trust and Darby investment teams. The San Mateo, California-based company has 60 years of investment experience and approximately US$561 billion in assets under management as of January 31, 2007.