Future Group firm Pantaloon Retail (India) said on Monday, it will merge its wholly-owned subsidiary Future Value Retail, which runs Big Bazaar and Food Bazaar stores, with itself.
In a meeting held yesterday, Board of Director of Pantaloon Retail (India) Ltd (PRIL) decided the “merger of Future Value Retail Ltd, a wholly owned subsidiary with the company”. The company, however, did not share details of the proposed merger.
Future Value Retail operates 148 Big Bazaar and 169 Food Bazaar stores, among other formats, in over 70 cities across the country, according to its website. It also runs another retail brand KB’s Fairprice.
In a filing to the BSE, PRIL also said it will “demerge business undertaking, comprising all operations pertaining to the Pantaloons Format Business of the company and transfer it to Peter England Fashions and Retail Ltd (PEFRL) by way of a scheme of arrangement”. A debt of Rs 1,600 crore will be transferred to PEFRL. The date of transfer has been fixed at July 1, 2012.
Yesterday, Aditya Birla group firm and PEFRL’s board had approved the demerger of Pantaloon format business and fixed the share swap ratio at 1:5, meaning for every five shares of Pantaloon, the shareholders will get one Peter England share.
The shares of PRIL were trading 4.25 per cent up at Rs 149.65 apiece on BSE during afternoon
These developments mark a step closer towards Aditya Birla Group’s proposed acquisition of majority stake in Kishore Biyani-led group’s flagship Pantaloon format apparel retail business unit.
Post-demerger, the holding of ABNL in PRIL through its subsidiary PEFRL, will be 50.09 per cent.
The group, laden with an estimated consolidated debt of Rs 6,000 crore, was understood to have finalised plans to exit from stationery joint venture with US-based Staples by selling its entire stake to the partner for up to Rs 170 crore.