Future Lifestyle Fashions Ltd plans to raise Rs450 crore by selling holdings in its investee brand portfolio, the company said in a stock exchange filing on Wednesday night.
It is also transferring its Lee Cooper business to a subsidiary called Future Specialty Retail Ltd “by way of a slump exchange on a going concern basis".
Over the years, Future Lifestyle Fashions has invested in multiple brands at an early entrepreneurial stage, acquiring minority and majority stakes. In order to monetize the holdings, it has now transferred them to a subsidiary called FLFL Lifestyle Brands Ltd.
After the deal, Future Lifestyle Fashions will hold a 49% equity stake in FLFL Lifestyle Brands and the portfolio companies will continue to be run independently by their respective entrepreneurs.
The transaction is expected to reduce debt at Future Lifestyle Fashions, part of Kishore Biyani’s Future Group, and a small portion of the funds raised will also be used to grow its portfolio of brands.
In a separate filing, the firm said Future Specialty Retail issued and allotted 400 compulsory convertible preference shares, with a face value of Rs910 each, and 150 optionally convertible debentures with a face value of Rs1 crore each to it in order to transfer Lee Cooper to the subsidiary.
This will lead to better focus, execution and faster scaling up of Lee Cooper, the company said in its filing.
Future Lifestyle Fashions includes brands like Cover Story, Jealous 21, Mother Earth, Scullers and Indigo Nation.
On Tuesday, the company had announced the incorporation of a subsidiary called FLFL Business Services Ltd with an authorized capital of Rs15 lakh. The objective of this subsidiary is to carry on the business of and provide services to Future’s fashion retail business, the company said.