Shares of Arvind Fashion moved larger by 16 per cent to Rs 196.65 on the BSE within the intra-day commerce on Thursday after the nation’s main casual and denim clothes producer introduced a divestment of the property of ‘Unlimited’ business to V-Mart Retail in an all money transaction for about Rs 150 crore. The company stated it had determined to exit this business and to concentrate on rising the high-conviction focus manufacturers.
“Arvind Lifestyle Brands Limited (ALBL), a wholly-owned subsidiary of Arvind Fashions Limited (AFL), has signed definitive agreements for strategic sale of property of its Unlimited retail business to V-Mart Retail Ltd. in an all money transaction,” Arvind Fashions stated in a media launch.
As a part of the transaction, ALBL will sell property consisting of mounted property, lease deposits and recognized stock and different present property of the 74 retail shops and the warehouse to V-Mart at its guide worth.
As per the deal, ALBL would obtain money consideration estimated at about Rs 150 crore upon the closure of transaction and thus, will totally recuperate the capital employed within the business. In addition, there are contingent funds to be acquired, primarily based on sure milestones achieved by V-Mart over subsequent few years for these shops, put up the acquisition. The Company intends to utilise the quantity so acquired for compensation of debt and for working capital functions.
“This sale will help AFL achieve its objective of focusing on its 6 high conviction brands which include US Polo Assn., Tommy Hilfiger, Arrow, Flying Machine, Calvin Klein and Sephora. This also significantly completes the process of reset that AFL had embarked on, to consolidate and sharpen its portfolio as well as to strengthen its balance sheet,” it stated.
The completion of transaction is topic to obligatory approvals and customary closing circumstances.
Meanwhile, shares of V-Mart Retail traded 2 per cent larger at Rs 3,304, after hitting a intra-day excessive of Rs 3,319 on the BSE.