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Pantaloon Retail India Ltd (PRIL) is de-merging its apparel and accessories business. The company, which is part of Kishore Biyani's Future Group, operates the ‘pantaloon format' business through 65 stores and 21 factory outlets. This will now be hived off to a new company that will be listed on both the BSE and the NSE.
Aditya Birla Nuvo (ABNL) will pick up a majority stake in the new company. It will subscribe to debentures amounting to Rs 800 crore issued by Pantaloon in the hived-off company. On completion of this process, the debentures will convert into equity in the new entity. The move is expected to reduce Pantaloon's huge debt burden by Rs 1,600 crore
Pantaloon Retail will retain a minority stake in the new company and continue to manage it.
Open offer
According to officials at the Future Group, Aditya Birla Novo, through its group company, Madura Fashion & Lifestyle, is expected to pick up to 50.01 per cent stake in the new company. This is expected to trigger an open offer.
Pantaloon Retail shareholders would be holding another 25 per cent stake in the company. Pantaloon Retail would offload Rs 800 crore debt from its balance-sheet into the new company. At the same time Aditya Birla would invest Rs 800 crore into the new company.
ABNL's Rs 1,145-crore Madura Fashion & Lifestyle has brands such as Louis Philippe, Van Heusen and Peter England.
purvita@thehindu.co.in
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