ABFRL to de-merge Madura Fashion to new entity ABLBL, raise Rs 2,500 crore

Aditya Birla Fashion and Retail Limited plans to de-merge its fashion retail business Madura Fashion and establish it as a separate listed entity called ‘Aditya Birla Lifestyle Brands Limited’. The business then plans to raise Rs 2,500 crore to help expand its remaining ABFRL businesses.

The business plans to raise the Rs 2,500 crore within a year of splitting off Madura Fashions, ET Bureau reported. Following the demerger, shareholders with stocks in ABFRL will then have identical shareholdings with both businesses.
 
“The demerger is expected to unlock significant value for the shareholders of ABFRL as each of the listed entities will have their own distinct capital structures, independent growth trajectories, and value creation opportunities,” announced the business in a stock exchange filing, the Economic Times reported. “Within 12 months after the completion of the demerger, ABFRL plans to raise about Rs 2,500 crore equity capital to strengthen its balance sheet and fund the growth of the remaining businesses. The company’s promoter group will fully support the proposed equity raise.”
 
The Madura business at ABLBL will include apparel and lifestyle brands Peter England, Louis Phillippe, Allen Solly, and Van Heusen as well as fashion brands Forever 21 and American Eagle. The business will also include sportswear and sneaker brand Reebok, which the company retails in the Indian market.