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The board of Aditya Birla Fashion and Retail Limited (ABFRL), in its meeting on Monday, has authorized the company’s management to evaluate the vertical demerger of the Madura Fashion and Lifestyle business from ABFRL to a separate listed company. gave to.
The company said in its BSE filing that the proposed demerger will enable the creation of two separately listed companies as independent growth engines with different capital structures and parallel value creation opportunities.
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He added: “As the platform embarks on its next transformational phase of growth, there is scope to reassess its capital structure to optimize different parts of its portfolio.” The move to a simpler and more streamlined architecture is designed to create clear opportunities for value creation. This strategic realignment is expected to significantly increase long-term stakeholder value. ”
The Madura Fashion & Lifestyle (MFL) business segment consists of four lifestyle and casual wear brands: Louis Philippe, Van Heusen, Allen Solly and Peter England.
American Eagle, Forever 21, sportswear brand Reebok and Van Heusen’s innerwear business will be split into separate publicly traded companies. This portfolio is a long-term leader with a track record of consistent revenue growth, profitability, strong free cash flow, and high returns on capital.
The company will have a strong balance sheet that will support its future growth ambitions. After the necessary approvals, the demerger will be implemented through his NCLT scheme of arrangement and all the shareholders of ABFRL will hold identical shares in the newly formed entity.
The remaining ABFRL will focus on high-growth segments driven by the shift from unbranded to branded brands, premiumization, the rise of super-premium and luxury, and the rapid growth of digital-first brands with a focus on Gen Z. I will guess.
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