>FUTURE GROUP DEMERGES PANTALOONS RETAIL FORMAT FROM FLAGSHIP COMPANY

ADITYA BIRLA NUVO TO INVEST IN PANTALOONS FORMAT

Future group today announced the intent to execute a full demerger of Pantaloons retail format from Pantaloon Retail India Limited (PRIL). On completion of the demerger process, subject to necessary and statutory approvals, the demerged entity will be automatically listed in NSE & BSE. Future group also announced that the demerged entity, will invite an investment from Aditya Birla Nuvo Limited (ABNL)


Scheme of Demerger-
• PRIL will issue debentures to ABNL worth Rs800 crore at mutually agreed terms, convertible in the equity shares of the resulting entity i.e. Pantaloons Format business.
• PRIL will demerge its Pantaloons Format business through a court scheme of arrangement. PRIL will transfer the net assets of its business, its apportioned debt of Rs800 crore and debentures of Rs 800 crore to the resulting entity. After the demerger, the debentures will be converted into equity shares of the resulting entity.
• ABNL will make an open offer of a minimum 26% to the shareholder’s of the resulting entity. After the listing of the resulting entity and on conversion of debentures into equity, ABNL’s holding in the resulting entity post open offer shall be a minimum of 50.01%.The resulting entity will become a subsidiary of ABNL.
• The proposed transaction likely to be completed within 8 to 10 months.


Rationale for ABNL-
• Post the acquisition, the two entities ABNL’s Madura Fashion & Lifestyle and PRIL will work closely as partners to derive operational synergies.
• Pantaloons Format business is spread over 2.05 million square feet and in the medium term the format is expected to add 20 stores annually which will be of great advantage for ABNL.


Rationale for PRIL-
• Post demerger, the total debt of Pantaloon Retail will be reduce by Rs 1600 crore.