Cobra's founder toasts £27.5m fundraiser

Cobra Beer, the Indian lager company set up by Lord Bilimoria of Chelsea, has put its flotation plans on ice for three years after securing a £27.5m cash injection.

The bulk of the cash has come from Och-Ziff Capital Management, the US hedge fund that backed Malcolm Glazer's takeover of Manchester United.

Lord Bilimoria, who started Cobra in 1989 with £20,000 of student debt, said the funds would help the company double its growth rate to 50 per cent per year and expand into new markets.

"This gives us the opportunity to take the company to the next level before we float," he said, adding that there was an internal deadline of June 2009 to seek a public listing. The fundraising values Cobra at about £80m.

Och-Ziff has lent Cobra £25m via a loan that means the lager company will not pay any interest until the repayment date. In return, it has been granted warrants it can exchange for a "good minority stake" when Cobra eventually floats, Lord Bilimoria said. He owns 72 per cent of the company but will see that decrease to under two-thirds. The other £2.5m has been raised from a share placing to private and institutional investors, including many of Lord Bilimoria's friends from university.

Cobra intends to spend about $10m (£5.4m) of its new funds on building a brewery in Hyderabad, Lord Bilimoria's hometown in South-west India. The company has subsidiaries in the US, South Africa and India. It brews beer in five countries, including Belgium and the Netherlands.