Mumbai: The country’s largest shopping chain by market value, Pantaloon Retail (India) Ltd, said its board has approved spinning off Big Bazaar and Food Bazaar into a new subsidiary, Future Value Retail, to raise capital.
The flagship company of the Kishore Biyani-led Future Group has 119 Big Bazaar stores in more than 70 cities in India, and plans to expand this to 275 by 2014.
The firm also has approval to consolidate its interests in Future Capital Holdings Ltd and insurance joint venture companies into a single entity, it said in a statement on Friday.
Its board has also approved the transfer of non-allied retail businesses such as Future Brands Ltd, Future Knowledge Services Ltd and Future Learning and Development Ltd to PFH Entertainment Ltd, a promoter company.
“We had invested Rs90 crore in these businesses and are now getting Rs190 crore for its sale. The promoter company will grow these businesses,” said B. Anand, chief financial officer, Pantaloon Retail to Mint.
“In order to unlock more value for the shareholders, the management had proposed to independently govern and build these businesses, while retaining the character of Pantaloon Retail as a pure retail play, focusing on retail businesses,” Biyani, Pantaloon’s managing director, said in a statement.
Mint had reported earlier in October that Biyani would consolidate the 22 companies in the group into three verticals—retail, logistics and financial services—which would be controlled by the promoters through a main holding company.