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| Edited By: Shailaja Sharma |Source: DNA |Updated: Mar 30, 2018, 02:33 AM IST
Pantaloon Retail (India) Ltd is taking the consolidation of its retail business a step further by merging the consumer durable, home furnishing and furniture business of its subsidiary Home Solutions Retail (India) Ltd (HSRIL) with itself.
The consolidation will involve demerger of consumer durable, home furnishing, home improvement, and furniture business from HSRIL into the company.
Pantaloon Retail holds 66.86% stake in HSRIL that operates six formats — Home Town, Furniture Bazaar, Electronic Bazaar, Home Bazaar, eZone and Collection i.
Of the six formats, the company is consolidating five divisions, except Collection i into itself. Collection i has very few furniture and furnishings stores in select cities and will continue to be under HSRIL. It is currently contributing only 4% to HSRIL’s revenues. Pantaloon said in a filing to the Bombay Stock Exchange on Wednesday that the scheme of arrangement was subject to approval from the shareholders, court and other authorities.
Pantaloon will also acquire the sports retail business from its wholly owned subsidiary, Winner Sports Ltd that operates Planet Sports chain apart from licencee stores for brands such as Converse, Adidas and Puma.
Pantaloon, in order to become a pure retail player, embarked on separating its retail businesses from non-retail ones about three months ago. In January, the company hived off its value retail chains — Big Bazaar and Food Bazaar — into a wholly owned subsidiary. The steps to consolidate HSRIL and sports retail business will further make the retail business more compact.
Pantaloon, over the period of 4-6 months, plans to complete the restructuring of its retail and financial and support services businesses, a spokesperson said.
The consolidation is being done to unlock shareholder value and to fuel company’s expansion and fund raising plans.
HSRIL shareholders would be issued fresh shares and convertible preference shares of Pantaloon valued at Rs 366.34 per share, the filing to the BSE said.
Pantaloon will issue about 6 million shares of Rs 2 each for the around 10 million shares in HSRIL, excluding those owned by the company. It will also give 6.35 million preference shares of Rs 100 each to the HSRIL’s shareholders that can be converted into equity within 12 months from the date of allotment, the company said.
