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5/7/2015

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BirlastomergeMaduraGarmentsinto
PantaloonsFashion
MovetocreateIndia'slargestapparelretailplayer,valuedatRs12,000cr
BSReporters|MumbaiMay04,2015LastUpdatedat00:51IST
The

AdityaBirlaGroupChairman,KumarMangalamBirlaandSushilAgarwal,CFO,AdityaBirla
Nuvoduringtheannouncement.Photo:KamleshPednekar
KumarMangalamBirlacontrolledgrouponSundayannouncedaplantomergeitsAdityaBirlaNuvo
Ltd(ABNL)operatedfashionretailingbusinesswithPantaloonsFashion&Retail.Thiswillcreate
Indiaslargestbrandedapparelplayer,valuedatRs12,000crore.
Accordingtotheplan,MaduraFashion(thebrandedapparelretaildivision)andMaduraLifestyle(the
luxurybrandedapparelretailingarmofABNL)willbedemergedintoPantaloonsFashions,alisted
subsidiaryofthegroup.
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WINWINDEAL
AdityaBirlaNuvoshareholderstoget26new
equitysharesofPantaloonsforevery5shares
held
MaduraGarmentsshareholdersget7new
equitysharesofPantaloonsforevery500
sharesheld
PreferenceshareholderofMaduraGarments
getsonenewequityshareofPantaloons
PantaloonstoberenamedAdityaBirlaFashion
&Retail
MergedentityvaluedatRs12,000crore
ValueunlockingforAdityaBirlaNuvo
shareholders
Aftertherestructuring,PantaloonsFashionwillberenamedAdityaBirlaFashion&RetailLimited,and
have1,900storesacrossIndia.ThecombinedentitywillhaveadebtofRs1,775crore,afterloansof
aboutRs475crorewillbepassedfromMaduratoPantaloons.
ALSOREAD:Modiis100%onexpectationsinhisfirstyearterm:KumarMangalamBirla
Underthemergerplan,ABNLshareholderswillget26newequitysharesofPantaloonsforeveryfive
ABNLequitysharesheld,followingthedemergerofMaduraFashion.Similarly,shareholdersofMadura
GarmentswillgetsevennewequitysharesofPantaloonsforevery500MaduraGarmentequityshares
held,pursuanttothedemergerofMaduraLifestyle.ThepreferenceshareholderofMaduraGarments
LifestylewillgetonenewequityshareofPantaloons.Afterthedeal,Pantaloonsequitybasewill
increasefrom92.8millionto772.8millionshares.
Theideaistounlockvalueforourshareholdersinboth
ABNLandPantaloonsFashion,saidAdityaBirla
GroupChairmanKumarMangalamBirla.Healsosaid
fashionretailingwasdoingfarbetterthanthecountrys
economy,withthecombinedentitysrevenuegrowing
by40percentandEbitdaby43percent,inthepasttwo
years.
StandardCharteredBankwastheadvisorforthe
transaction,andPriceWaterhouse&CoLLPandBansi
SMehta&Cowerethevaluers.
Withthisrestructuring,anABNLshareholderholding
100shareswillget520Pantaloonsshares,inadditionto
the100ABNLones.Thepromoterswillownclosetoa
60percentstakeinPantaloonsaftertherestructuring,
comparedwiththepresent72percent.Thegroup
decidedtokeepitsMorebrandedgrocerystoresoutofthemergerscheme,andsaiditwouldnotoffer
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anystakeinthenewcompanytoprivateequityplayers.
ThisconsolidationwillcreateIndiaslargestpureplayfashion&lifestylecompany,withastrong
bouquetofleadingfashionbrandsandretailformats.ThismovebringsIndiasnumberonebranded
menswearandwomenswearplayerstogether,thechairmansaid.Headdedthecompanysinternal
accrualswereenoughtofunditsgrowthplansandthetransactionwouldbecompletedinsixtonine
months.
InvestorsofABNLhadbeenaskingforademergerforalongtime.Thisentitywillcreatethelargest
pureplayfashioncompanyinthecountryandremovetheholdingcompanydiscountofABNL,Kumar
MangalamBirlasaid.ThePantaloonsbrandwillcontinueatthelevelofstores,evenasthecompanys
namewillchange.ThedebttoequityratioofPantaloonswillimproveafterthescheme.
Thiswillalsobringallbrandedapparelbusinessesunderoneroof,acceleratethegrowthofthese
businesses,andhelpexploitemergingopportunitiespresentedbytherapidlygrowingIndianapparel
market,saidPranabBarua,thegroupsbusinessdirector(apparel&retailbusiness).
Theconsolidationwouldalsoenabletappingofoperationalsynergiesonvariousfronts,suchassourcing,
realestateandtechnologyplatforms,thegroupsaidinastatement.
StandardCharteredBankwastheadvisorforthetransactionwhilePriceWaterhouse&Co.LLPand
BansiS.Mehta&Cowerethevaluers.

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