Chennai, NFAPost: Shares of Furutre Retail on Monday closed at Rs 162.30, a 20% increase from its previous close, on the BSE, after Reliance Retail Ventures Limited (RRVL), subsidiary of Reliance Industries Limited, announced that it is acquiring the Retail & Wholesale Business and the Logistics & Warehousing Business from the Future Group.
Future Group on Saturday announced a major reorganisation of its businesses in which the key group companies including Future Retail, Future Lifestyle Fashions, Future Consumer, Future Supply Chains and Future Market Networks will merge into Future Enterprises Limited (FEL).
Future Enterprises will subsequently sell by way of a slump sale the retail and wholsesale business that includes key formats such as Big Bazaar, fbb, Foodhall, Easyday, Nilgiris, Central and Brand Factory to Reliance Retail and Fashion Lifestyle Limited (RRFLL).
RRFLL proposes to invest Rs 1,200 crore in the preferential issue of equity shares of FEL to acquire 6.09% of post-merger equity; and Rs 400 crore in a preferential issue of equity warrants which, upon conversion and payment of balance 75% of the issue price, will result in RRFLL acquiring further 7.05% of FEL.
Reliance Retail Ventures Limited Director Isha Ambani said that they hope to continue the growth momentum of the retail industry with its unique model of active collaboration with small merchants and kiranas as well as large consumer brands.
The acquisition of the retail, wholesale and supply chain business of the Future Group complements and makes a strong strategic fit into Reliance’s retail business. This will help Reliance retail accelerate providing support to millions of small merchants in increasing their competitiveness and enhance their income during these challenging times, Reliance Retail Ventures said.
“As a result of this reorganisation and transaction, Future Group will achieve a holistic solution to the challenges that have been caused by Covid and the macro economic environment. This transaction takes into account the interest of all its stakeholders including lenders, shareholders, creditors, suppliers and employees giving continuity to all its businesses,” Future Group Group CEO Kishore Biyani said.
RIL is India’s largest private sector company, with a consolidated turnover of Rs 659,205 crore ($87.1 billion), cash profit of Rs 71,446 crore ($9.4 billion), and net profit of Rs 39,880 crore ($5.3 billion) for the year ended March 31, 2020.
