New Delhi: Future Group CEO Kishore Biyani on Friday said his company’s flagship retail chain Pantaloon Retail India Ltd will exit its non-core businesses in order to pare debt and fund growth plans.
As one of the first steps toward achieving the goal, Pantaloon Retail India Ltd (PRIL) will divest its stake in Future Capital Holdings within the next four to six months.
“We (PRIL) have many other businesses such as textiles and media, which we can exit and become a zero debt company,” Biyani told reporters here.
He, however, added that the divestment is not only aimed at reducing debt, but also, “We are able to make acquisitions and expand our existing core retail businesses.”
PRIL has reported its debt liability at Rs 4,200 crore as of 30 June, 2011.
Biyani said the company is looking to reduce its debt exposure and expand in core businesses.
Nevertheless, he underlined that PRIL’s debt equity ratio is 1.2:1 at present, “which is not a problem” and “the divestment will help us grow”.
Citing the example of divesting stake in non-core ventures by PRIL in Future Group firms, Biyani said the flagship retail chain is in the process of selling its stake in Future Capital Holdings.
“We are looking to divest Pantaloon’s take in Future Capital Holdings and the process is on. It will take about 4-6 months’ time,” he said.
Biyani, however, did not specify how much stake would be sold and also the parties with which the company is in talks for the same.
PRIL has a 55% stake in the financial services arm of the group, Future Capital Holdings.
The firm has earmarked Rs 900 crore expenditure over the next three years on 9 million square feet of retail space, which it has already booked across India for expansion.
Asked about the possibility of the government allowing foreign direct investment in multi-brand retail, Biyani said: “Things are moving... It has to happen and we are hopeful... but that does not impact our business plan.”