Aditya Birla Fashion Board Approves Demerger Of Madura Fashion And Lifestyle

The board of directors of Aditya Birla Fashion and Retail Ltd. approved the demerger of its Madura Fashion and Lifestyle business into a separate entity. The newly formed entity will be named Aditya Birla Lifestyle Brands Ltd. and will be listed after the demerger.

Each of the listed companies will have separate capital structures, independent growth trajectories and value creation opportunities, according to a statement.

The demerger will be implemented through an NCLT scheme of arrangement. After the completion of the demerger, all the shareholders will receive identical shareholding in the newly formed entity, it said.

Following the demerger, the portfolio of Aditya Birla Lifestyle Brands will include lifestyle brands (Louis Phillippe, Van Heusen, Allen Solly and Peter England), casual wear (American Eagle and Forever 21), sportswear (Reebok) and innerwear business (under Van Heusen brand), the statement said.

The portfolio of ABFRL will consist of value retail, ethnic portfolio luxury and digital brands.

The approved demerger will be subject to necessary approval from shareholders, creditors, regulators, along with other customary approvals.

Shareholders of ABFRL will get one share of ABLBL for every one share in ABFRL after the demerger. This will be in addition to their existing shareholding in ABFRL.

Assets and liabilities will be divided between the two companies. Overall borrowings of ABFRL stood at Rs 3,000 crore, as of March 31, 2024.

The approximate amount to be transferred to ABLBL will be Rs 1,000 crore and the rest will continue to stay with ABFRL, it said. The company will raise Rs 2,500 crore capital within 12 months after the completion of the demerger, to make its balance sheet strong and fund its remaining business.

Shares of Aditya Birla Fashion and Retail closed 0.81% higher at Rs 231.40 apiece, as compared with a 0.83% rise in the benchmark BSE Sensex.