Within 12 months after the completion of the vertical demerger of Madhura Fashion & Lifestyle, ABFRL plans to raise about Rs 2,500 crore equity capital to strengthen its balance sheet and fund the growth of the remaining businesses.
The demerger is expected to unlock significant value for the shareholders of ABFRL as each of the listed entities will have their own distinct capital structures, independent growth trajectories, and value creation opportunities, the company said in a statement.
The demerger will be implemented through an NCLT scheme of arrangement and upon its completion, all shareholders of ABFRL will have identical shareholdings in both the companies.
The newly-listed entity Aditya Birla Lifestyle Brands (ABLBL) will house the business consisting of lifestyle brands including Louis Phillippe, Van Heusen, Allen Solly & Peter England; casual wear brands American Eagle & Forever 21 and sportswear brand, Reebok and the innerwear business under the Van Heusen brand
Meanwhile, Aditya Birla Fashion and Retail (ABFRL) will house the remaining businesses including value and masstige fashion retail play under Pantaloons & Style Up, one of India’s most comprehensive ethnic wear portfolios, a recently acquired portfolio of TCNS brands, a fast-growing bridge to luxury & luxury platform of The Collective, Galleries Lafayette and select luxury brands, and a leading portfolio of digital-first fashion brands, TMRW.
ABFRL further said that the business assets and liabilities will be split between the two companies in accordance with the prescribed regulatory provisions. In line with this, the overall ABFRL borrowing, which is estimated to be around Rs 3,000 crore as of March 31, 2024, will be split between the two companies. The estimated debt to be transferred to ABLBL will be Rs 1,000 crore, and the balance will continue to stay with ABFRL.
