India : ABNL board okays termination of Pantaloons GDR issue

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ABNL board okays termination of Pantaloons GDR issue

05
Sep '15

The Aditya Birla Nuvo board has told the BSE that it has approved termination of plans to issue Global Depository Receipt or GDR by group firm Pantaloons Fashion and Retail (PFRL) as envisaged under a merger scheme to consolidate their branded apparel business due to regulatory issues, according to media reports.

Multi-brand retailer PFRL had made an application to "relevant authority" to seek permission to issue GDRs and shares to the GDR holders and non-resident shareholders of Aditya Birla Nuvo (ABNL) in line with the merger scheme.

In a BSE filing, the company said that based on discussions with such authority, it transpired that PFRL's application shall not be favourably considered as it is not permissible under the extant FDI policy and hence, PFRL has withdrawn the application.

Following the development, the board of directors of ABNL approved the termination of the GDR programme, the company said in the BSE filing.

ABNL said its GDR holders shall be entitled to converting their GDRs into its shares and they would be treated in the same manner as other shareholders holding shares under the FD route in the company.

As for issuing of shares to non-resident shareholders by PFRL, the filing said PFRL "would keep issuance of shares to such shareholders in abeyance... until such time as PFRL is permitted to issue such shares under applicable law or by specific approval or it determines other steps to be taken in lieu of such issuance".

In May this year, the Aditya Birla group had announced merger of its apparel business.

Under the scheme, the apparel businesses of ABNL and another group firm Madura Garments Lifestyle Retail Company Ltd (MGLRCL) was merged into listed firm Pantaloons Fashion & Retail Ltd (PFRL), which was to be renamed as Aditya Birla Fashion and Retail (ABFRL).

The new entity was envisaged to have a retail network of 1,869 exclusive stores with an estimated revenue of over Rs 6,000 crore. (SH)

Fibre2Fashion News Desk – India

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