Future Group’s Pantaloon Retail not only plans to raise Rs 1,500 crore but is also looking at a major restructuring of the company. In a board meeting held on Monday, the company board approved the company’s restructuring plans.
In a major restructuring exercise, the company will either sell or transfer its retail and fashion divisions to its wholly owned subsidiaries. It is, however, subject to consent of a majority of shareholders of the company and other statutory and regulatory approvals. The board has also approved the company’s plans to rechristen Pantaloon Retail as ‘Future Markets and Consumer Group Ltd’.
The board also approved raising Rs 368 crore through preferential allotment of shares and warrants. The company will raise Rs 201.3 crore by issuing equity shares to the promoters and their associates. It will also raise Rs 75.03 crore from Dharmyug Investments Ltd., through issue of equity shares. It will raise another Rs 91.5 crore by issuing warrants to the promoters and their associates with an option to acquire the same number of equity shares within a period of 18 months.
Future Group is also learnt to be in talks with Carlyle, Bain Capital, Blackstone, Kohlberg Kravis & Roberts (KKR) for private equity funding of about Rs 1,100-1,200 crore, according to a PTI report.
The report adds that the group can hive off its retail segments, Big Bazaar and Food Bazaar, into a separate entity, Future Value Retail, should they find a suitable partner for it. Recently, the group also decided to cut prices at Pantaloons to drive sales and overcome the slowdown. It has decided that the price of products sold through the Pantaloons chain will be reduced to the level of 2007.
The group currently operates 44 Pantaloons outlets and plans to open six more Pantaloons stores by October, including two in Bangalore and one in Kolkata. The Pantaloon chain contributes around 14% to the group’s turnover.