Raymond demerges its core lifestyle business in restructuring exercise
Mumbai (Maharashtra) [India], Nov 7 (ANI): Fashion and textile retailer Raymond Ltd on Thursday announced the demerger of its core lifestyle business into a separate entity that will be listed through mirror shareholding structure.
ANI
Nov 07, 2019 18:29 IST
Mumbai (Maharashtra) [India], Nov 7 (ANI): Fashion and textile retailer Raymond Ltd on Thursday announced the demerger of its core lifestyle business into a separate entity that will be listed through mirror shareholding structure.
Every shareholder of Raymond will be issued the shares of the new company in the ratio of 1:1. The move will create a clear demarcation of lifestyle and other businesses leading to the simplification of the group structure.
In another development, Raymond announced the allotment of equity shares and compulsorily convertible preference shares to JK Investo Trade (JKIT), an associate company against the infusion of net proceeds of JKIT land sale that was announced last month.
A total of Rs 350 crore will be used to repay the debt, thus deleveraging the balance sheet of Raymond Ltd.
"For over three years now, we have been relentless in building the organisation that is future-ready and our efforts have been unwavering during this transformational journey despite multiple challenges," said Chairman and Managing Director Gautam Hari Singhania.
"As we continue to build capacities for enhanced performance and delivery across verticals, demerging the core lifestyle business is an affirmative step towards that direction and this will also simplify the group structure. We remain resolute to take the right steps to enhance value creation for our shareholders."
Group Chief Financial Officer Sanjay Bahl said that in line with the company's stated strategy of asset monetisation, the infusion of net proceeds of JKIT land sale in Raymond will help in debt reduction leading to better operational efficiencies.
"As our balance sheet will get leaner, it will lead to better profitability at the group level. The demerger of lifestyle business will enable the demerged company and the resulting companies to have focused strategy and specialisation for sustained growth and the ability to attract investors for better access to capital," he said.
With a large network of over 1,500 stores across more than 600 towns and cities, Raymond lifestyle business offers an integrated play in the textile, apparel and garmenting segments both in domestic and global markets.
With this demerger, lifestyle business will be well-positioned to capitalise on the emerging opportunities through newer capabilities across the entire value chain of fibre to fashion.
(ANI)
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