NCLT approves Raymond’s restructuring scheme to maximise shareholder value
The National Company Law Tribunal (NCLT) has sanctioned Raymond's restructuring scheme involving the demerger of its lifestyle business and amalgamation of its consumer trading arm. This approval paves the way for a more focused and streamlined corporate structure.
NCLT's approval facilitates the separation of Raymond Ltd and Raymond Lifestyle, the latter becoming the transferee company. The new structure will also incorporate Ray Global Consumer Trading. The lifestyle business of Raymond Ltd will be demerged into Raymond Lifestyle, while Ray Global Consumer Trading will be amalgamated into Raymond Lifestyle to create a more streamlined group structure.
According to the companies' petition to the NCLT Mumbai bench, the primary objective of the restructuring is to unlock the potential value of Raymond’s distinct business verticals. The significant growth in the textile and lifestyle segments warrants independent management and operations. The separation is expected to enable focused management, enhance operational synergies, and streamline the corporate structure.
The restructuring aims to attract targeted investments from stakeholders with specific interests and expertise in the respective industries. It is also expected to maximise shareholder value by creating two distinct, publicly listed entities.
Known for its textile and branded apparel productions as well as its venture into the real esate business, Raymond Ltd aims to achieve zero net debt for both lifestyle and non-lifestyle businesses post-restructuring. The move will help simplify operations, enhance management efficiency, and provide a clear strategic direction for each business unit. It will position Raymond Lifestyle as a key player in the consumer goods sector, with a distinct focus on lifestyle products and fast-moving consumer goods markets.
