The board of directors of Arvind Ltd have announced plans for demerger of its branded apparel business and the retail business (under the Megamart banner) into wholly owned subsidiaries with effect from April 1, 2009.
The demergers will be done with effect from April 1, 2009 through a court approved scheme and the company would be filing the requisite documents with appropriate authorities.
According to Sanjay Lalbhai, chairman and managing director, Arvind Ltd, “We are proposing the demerger of brands and Megamart business into separate wholly owned subsidiaries to bring enhanced financial focus on these entities and look at possible alternatives for fund raising in these vehicles at an appropriate time in future.”
Branded apparel business which markets apparels and accessories under the brands –Arrow, Flying Machine, Newport, Excalibur and yet to be launched brands like Izod, USPA, Pierre Cardin, Sansabelt and Hart Schaffner Marx will be demerged into Arvind Lifestyle Brands limited.
Retail business under the Megamart banner operating about 150 stores across India along with the license for value brand – Cherokee, will be demerged into Arvind Retail Limited. Enam Securities is the merchant banker advising the company on the transactions.
—IndiaRetailing Bureau, Mumbai