Home / Knowledge / News / Apparel/Garments / Birla group plans mega retail merger via share swap
Birla group plans mega retail merger via share swap
09
Apr '15
The Aditya Birla Group has proposed a four-way restructuring plan to bring its retail business under Pantaloon Fashion & Retail (PFRL) and offer a maximum of 10 per cent equity stake to an investor in the consolidated entity, according to media reports. 
 
The $30-billion group has sought informal guidance from the Securities Exchange Board of India (Sebi) on the efficacy of the proposed merger through a letter dated December 24, 2014. 
 
As the first step of the transaction, Madura Garments, a subsidiary of listed Aditya Birla Nuvo Ltd (ABNL), will be demerged into Pantaloons Fashion, and ABNL shareholders will get Pantaloons Fashion’s shares in return.
 
In step two, Madura Garments Lifestyle Retail Undertaking (MGL Retail Undertaking) will be demerged from Madura Garments and merged into Pantaloons Fashion, in consideration of which ABNL (shareholder of MGL) will get shares of Pantaloons Fashion. MGL Retail is engaged in the business of apparel retail and holding investments.
 
In step three, Aditya Birla Retail Ltd (ABRL), the operator of More superstores and 100 per cent owned by the promoters, will be demerged into Pantaloons Fashion and group promoters will get shares of Pantaloons in exchange and, finally, two financial investors will be offered up to 10 per cent stake each in the expanded capital of Pantaloons Fashion. Separate shareholder meetings of Pantaloons’ shareholders will be called for each investment, the proposal said.
 
After the merger, the Birlas will own up to 50 per cent stake. The Birlas currently own 72 per cent stake in Pantaloons Fashion.
 
The Birla group had been in talks to sell stake in the consolidated retail business to L Capital, Temasek and IFC and raise $500 million to fuel its expansion plans in a growing economy. 
 
The Aditya Birla group had to undertake the restructuring following heavy losses suffered by its retail companies. Pantaloons Fashion, acquired from Kishore Biyani’s Future group in 2012, posted a net loss of Rs 187 crore on net sales of Rs 1,661 crore in 2013-14. Pantaloon Retail has made a loss of Rs 42.78 crore for the quarter ending December 2014 on revenues of Rs 450 crore.
 

Fibre2fashion News Desk - India

Must ReadView All

Textiles | On 29th May 2017

Special package creates 7,50,000 jobs in garment sector

The special garment package of Rs 6,000 crore that was introduced by...

Md Siddiqur Rahman, president, BGMEA, addressing a press conference with other dignitaries. Courtesy: BGMEA

Apparel/Garments | On 29th May 2017

BGMEA asks govt for 5% incentive for 2 years in Budget

The Bangladesh Garment Manufacturers and Exporters Association...

Textiles | On 29th May 2017

Tintex, Bruckner bring new effects to knitted fabric

The textile company Tintex has joined hands with the system supplier...

Interviews View All

C Kamatchisundaram
Voltas

ITME is an occasion not only to receive new leads but also to work on...

Cyril Pereira
Reed Exhibitions India, organiser of Asian Machine Tool Exhibition 2016

'Major problem in the textile machinery manufacturing industry is the lack ...

Anvita Mehra
Confidential Couture

‘It is going to take some time for Indian buyers to get accustomed to...

Kevin Nelson
TissueGen

Kevin Nelson, Chief Scientific Officer, TissueGen discusses the growing...

Kai Poehler
Voith Paper GmbH & Co. KG

The glass mat industry is growing by five to eight per cent annually. Kai...

Marten Alkhagen
Swerea IVF AB

Marten Alkhagen, Senior Scientist - Nonwoven and Technical Textiles of...

Wendell Rodricks
Wendell Rodricks

"We should not compare India and the West. There are things we do that...

Rupa Sood and Sharan Apparao
Nayaab

Nayaab, an exhibition meant to celebrate Indian weaves, is in its second...

Ritu Kumar
Label Ritu Kumar

‘Classics will return’ "There are a lot of people wearing western clothes ...

Press Release

Press Release

Letter to Editor

Letter to Editor

RSS Feed

RSS Feed

Submit your press release on


editorial@fibre2fashion.com

Letter To Editor






(Max. 8000 char.)

Search Companies





SEARCH

news category


Related Categories:
May 2017

May 2017

Subscribe today and get the latest update on Textiles, Fashion, Apparel and so on.

SUBSCRIBE


Browse Our Archives

GO


E-News Insight
Subscribe Today and Get the
Latest News Update in Your Mail Box.
Advanced Search