ABFRL nod to Madura biz demerger into separate listed co

Aditya Birla Fashion and Retail's (ABFRL’s) board of directors on Friday approved the demerger of Madura business into a separate listed entity, the company said in its filing to the exchanges. The move is aimed at accelerating growth and value creation through two listed entities.

ABFRL plans to raise Rs 2,500 crore equity capital within 12 months of demerger with promoter participation.

Under the proposal, a vertical demerger of Madura Fashion and Lifestyle business (MFL Business) will be executed and the newly incorporated company named as Aditya Birla Lifestyle Brands Ltd (ABLBL) will be listed separately on completion of the demerger from ABFRL.

According to the company statement, the demerger is expected to unlock significant value for the shareholders of ABFRL as each of the listed entities will have their own distinct capital structures, independent growth trajectories and value creation opportunities.

The demerger will be implemented through an NCLT scheme of arrangement and upon its completion, all shareholders of ABFRL will have identical shareholdings in both the companies.

ABLBL will house the lifestyle brands Louis Phillippe, Van Heusen, Allen Solly & Peter England along with casual wear brands American Eagle and Forever 21. It will also have sportswear brand Reebok and an inner-wear business under Van Heusen brand.

ABLBL will house the lifestyle brands Louis Phillippe, Van Heusen, Allen Solly & Peter England along with casual wear brands American Eagle and Forever 21. It will also have sportswear brand Reebok and an inner-wear business under Van Heusen brand.

The business assets and liabilities will be split between the two companies in accordance with the prescribed regulatory provisions, the filing said.

In line with this, the overall ABFRL borrowing, which is estimated at Rs 3,000 crore as of March 31, 2024, will be split between the two companies. The estimated debt to be transferred to ABLBL will be Rs 1,000 crore while the balance will stay with ABFRL.