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Raymond restructures its business for value creation

08
Nov '19
Pic: Raymond Ltd
Pic: Raymond Ltd
Raymond Limited, India's largest integrated worsted suiting manufacturer that offers end-to-end solutions for fabrics and garmenting, announced the demerger of its core Lifestyle Business into a separate entity that will be listed through mirror shareholding structure. The move is in continuation of the company's transformational journey of value creation.
 
"Every shareholder of Raymond Ltd will be issued the shares of the new company in the ratio of 1:1. The move will create a clear demarcation of Lifestyle & other businesses leading to the simplification of the Group structure," Raymond said in a press release.
 
In another development, Raymond Limited announced the allotment of Equity Shares and Compulsorily Convertible Preference Shares (CCPS) to JKIT, an associate company against the infusion of net proceeds of JKIT land sale that was announced in October 2019. A total of ₹350 crore will be used to repay the debt thus deleveraging the balance sheet of Raymond Ltd. 
 
“For over three years now, we have been relentless in building the organisation that is future ready and our efforts have been unwavering during this transformational journey despite multiple challenges. As we continue to build capacities for enhanced performance and delivery across verticals, demerging the core Lifestyle Business is an affirmative step towards that direction and this will also simplify the Group structure. We remain resolute to take right steps to enhance value creation for our shareholders,” said Gautam Hari Singhania, chairman & managing director, Raymond Limited.
 
“In line with our stated strategy of asset monetisation, the infusion of net proceeds of JKIT land sale in Raymond Limited will help us in debt reduction leading to better operational efficiencies. As our balance sheet will get leaner, it will lead to a better profitability at the group level. The demerger of the Lifestyle Business will enable the Demerged Company and the Resulting Companies to have focused strategy and specialisation for sustained growth and the ability to attract investors for better access to capital,” said Sanjay Bahl, group chief financial officer, Raymond Limited.
 
Elaborating the benefits of this development for the business, Sanjay Behl, CEO Lifestyle Business, Raymond Limited said, “As this iconic brand is nearing its 100th year of existence, the Lifestyle Business is at the cusp of scaling-up exponentially to leverage its true potential. With a large network of over 1,500 stores across more than 600 towns and cities, Raymond Lifestyle business offers an integrated play in the textile, apparel and garmenting segments both in domestic and global markets. With this demerger Lifestyle Business will be well positioned to capitalise on the emerging opportunities through newer capabilities across the entire value chain of ‘fibre to fashion’.”
 

Fibre2Fashion News Desk (RKS)


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