Aditya Birla Group Demergers Madura fashion To Aditya Birla Lifestyle Brands
By: Geetanjali
Aditya Birla Group on Friday, April 19, 2024 announced to split Aditya Birla Fashion and Retail Limited (ABFRL) and Madura Fashion & Lifestyle (MFL) after the approval of boards of Directors for this vertical demerger.
The demerger has been done to form a new company named Aditya Birla Lifestyle Brands Limited (ABLBL), which will be listed as a separate entity after the completion of demerger. The Group plans to raise round Rs.2,500 crore equity capital in a time period of 12 months following the merger, with full support from its promoters.
Subsequently, ABLBL will accommodate lifestyle brands like Louis Phillippe, Van Heusen, Allen Solly & Peter England; casual wear brands like American Eagle and Forever 21; sportswear and innerwear brands Reebok and Van Heusen.
While ABFRL will house Pantaloons & Style Up; will house recently acquired brands under TCNS, ethnic designer-wear brand; luxury brands such as The Collective, Galleries Lafayette and digital brands under TMRW.
The company said that this step will advance growth and value-creation, through its two listed companies ABFRL and ABLBL, with strategic capital-allocation.
The company in its official statement said, “Upon completion of the demerger, as per the share entitlement ratio approved by the board and recommended by the independent valuer, the shareholders of ABFRL will get one share of ABLBL for every one share in ABFRL, in addition to their existing shareholding in ABFRL. The business assets and liabilities will be split between the two companies in accordance with the prescribed regulatory provisions”.
The split will be accorded by NCLT (National Company Law Tribunal) under its scheme of arrangement, after the demerger gets finalised, all shareholders will of ABFRL will also own same number of stakes in ABLBL, for every one share in the ABFRL shareholder will get one share in ABLBL in addition to their existing shares in ABFRL and so on.
Both the assets and liabilities will be split equally between the two companies as per the provisions. The split will also include ABFRL’s total borrowing of around Rs.3,000 crore as of March 31, 2024.
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