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Spencer's Retail to be demerged from CESC after Q3
12
Aug '13
Spencer’s Retail Limited, the retail arm of RP Sanjiv Goenka Group, would be demerged from CESC Ltd. after third quarter of the ongoing financial year, Mohit Kampani, President and CEO of Spencer’s told reporters on the sidelines of a retail seminar organized in Kolkata.
 
Mr. Kampani said placing much emphasis on profitability, the company aims to achieve positive EBITDA (earnings before interest, tax, depreciation and amortization) by end of ongoing quarter, and only after that would plan its demerger from CESC.
 
The company has several options for raising capital like inviting a strategic global retail investor or floating an Initial Public Offering (IPO) or placing shares with private equity (PE) funds. However, these options shall be assessed only after the company achieves positive EBITDA, he added.
 
Recently, Spencer’s Chairman Mr. Goenka had exuded confidence that the demerger model is sure to realise value. He said tough the company did not add any new hypermarkets last year, this fiscal it plans to set up 12 new hypermarkets across 10 cities at a cost of about Rs. 500 million. 
 
Also, there are plans for setting up a back-end support at Dankuni in West Bengal to cater to the eastern region and setting up shops in cities like Ranchi, Dhanbad and Raipur.
 
Post execution of the plans, Spencer’s total retail space would grow from the existing 950,000 square feet to 1.25 million square feet.
 
Part of the Rs. 90 billion RP-SG Group, the company now operates about 200 stores, including about 30 large format stores, across 45 cities in India.
 
Although Spencer’s Retail Limited began as a multi-format food-first retailer providing a wide range of quality products to discerning young customers, it has now added a wide selection of garments and fashion accessories, along with other items.
 

Fibre2fashion News Desk - India

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