ABFRL board approves vertical demerger of Madura Fashion and Lifestyle biz

The board of Aditya Birla Fashion and Retail (ABRFL) has approved the proposal of a vertical demerger of Madura Fashion and Lifestyle (MFL) business into a newly incorporated entity named as Aditya Birla Lifestyle Brands (ABLB).

ABFRL also plans to raise Rs 2,500 crore equity capital within 12 months of demerger with promoter participation, and it will be used 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, ABFRL said in its release.

It also added that ABLB will be listed separately on exchanges post the completion of the demerger.

On April 1, the board of directors of ABFRL had authorised the management of the company to evaluate the vertical demerger of the MFL business from ABFRL into a separate listed company.

It also said that upon completion of the demerger, as per the share entitlement ratio approved by the board and recommended by the independent valuer, the shareholders of ABFRL will get one share of ABLB for every one share in ABFRL, in addition to their existing shareholding in ABFRL.

Post the demerger, ABLB will house Louis Phillippe, Van Heusen, Allen Solly, Peter England, American Eagle, Forever 21, Reebok and the innerwear business under Van Heusen brand. 

ABFRL will house its value and masstige fashion retail play under Pantaloons and Style Up, its ethnic portfolio which also include its designer wear and the recently acquired portfolio of TCNS.