Raymond to demerge core lifestyle business; shareholders to get shares in the ratio of 1:1
Raymond Limited has announced the demerger of its core lifestyle business into a separate entity that will be listed through the mirror shareholding structure. Every shareholder of Raymond will be issued shares of the new company in the ratio of 1:1.
“The move will create a clear demarcation of lifestyle and other businesses leading to the simplification of the group structure,” the company said in a statement.
In another development, Raymond announced the allotment of equity shares and compulsorily convertible preference shares (CCPS) to JKIT, an associate company against infusion of the net proceeds of the JKIT land sale that was announced in October 2019.
A total of Rs 350 crore will be used to repay the debt, thus deleveraging the balance sheet of Raymond.
Gautam Hari Singhania, Chairman & Managing Director, Raymond, said, “As we continue to build capacities for enhanced performance and delivery across verticals, demerging the core lifestyle business is an affirmative step that will also simplify the group structure.”
Sanjay Bahl, Group Chief Financial Officer, Raymond, said, “In line with our stated strategy of asset monetisation, infusion of the net proceeds of the JKIT land sale in Raymond will help us in debt reduction, leading to better operational efficiencies. As our balance sheet will get leaner, it will lead to better profitability at the group level.”
“The demerger of the lifestyle business will enable the demerged company and the resulting companies to have focused strategy and specialisation for sustained growth and the ability to attract investors for better access to capital,” Bahl added.
The lifestyle business has a network of over 1,500 stores across more than 600 towns and cities. It has an integrated play in the textile, apparel and garmenting segments, both in the domestic and global markets.