Private equity firm Blackstone is seeking shareholder approval for an exit return incentive (ERI) plan that envisages to pay a compensation of between 1% and 4% of the proceeds that Blackstone will generate from a future sale of its stake in Sona Comstar (Sona BLW Precision Forgings Ltd) to select executives of the company, it said in annual general meeting notice to shareholders.
Blackstone holds a 34.18% stake in the auto component maker through an entity called Singapore VII Topco III PTE. Ltd.
“Under the ERI plan, Singapore VII proposes to give the identified employees cash payments from the proceeds it received/receives from a disposition event (disposition payments). These disposition payments may be made in three instalments, part at the time of the disposition event and then on the first and second anniversaries of Singapore VII’s complete disposition of its ownership in the company, as per the ERI plan,” said the notice of the annual general meeting to be held on September 9.
The amount of the cash made to the employees will depend on the multiple of the invested capital and returns realized by Singapore VII from the proceeds of the stake sale, it said.