Kishore Biyani-led Future Retail Ltd. has announced its plans to acquire the in-house leased assets held by Future Enterprises Ltd. for Rs. 4,000 crore.
According to its investor presentation to the stock exchanges, the acquisition will effectively reduce the annual lease rentals by up to Rs. 650 crore annually.
Additionally, it will end all corporate guarantees provided by Future Retail to Future Enterprises.
Future Enterprises had Rs. 7,225 crore worth assets under leasing and liabilities of Rs. 720.51 crore from the same segment, according to its filing. Its revenue stood at Rs. 742.97 crore for the year ended March 2019.
The fair value of the proposed asset will be determined by an independent valuation report backed by fairness opinion, it said. The transaction is subject to shareholder approval as it falls under related-party transaction norms.
The company will hold its extraordinary general meeting on 8 November.
Future Retail said it will acquire these assets from the sum it will receive from balance warrants issuance, equity upside share and existing credit facilities available with the company. Future Corporate Resources Pvt. Ltd. owns a 47.02 per cent stake in Future Retail.
Earlier this year, the e-commerce giant Amazon was allowed to acquire 49 per cent in Future Coupons. In addition, the promoters have given a call option to Amazon to acquire all or part of the promoter shareholding in Future Retail, exercisable between third and tenth year after entering into an agreement.
Future Retail had 1,557 stores in 437 cities and it occupied total retail space of 16.3 million square feet at the end of June 2019.
Source:-https://in.apparelresources.com/business-news