FUND SEARCH

New Delhi, May 11: Pantaloon Retail has called an extraordinary general meeting tomorrow to seek the approval from shareholders to raise promoters’ stake to 51 per cent through a preferential issue of shares and warrants.

The Kishore Biyani company plans to make a preferential issue of 11 million equity shares to its promoters at Rs 183 apiece to raise Rs 201 crore. It also wants to sell 4.1 million shares to Dharmayug Investments at the same price to raise Rs 75 crore.

The retail chain has also proposed to issue 5 million warrants to the promoters and their associates, which can be converted into equity shares after 18 months. The price for the warrant conversion will also be Rs 183, aggregating Rs 91.5 crore.

At present, the promoter group — mostly Kishore Biyani and his family members — owns about 46.50 per cent of Pantaloon Retail.

If the proposal is approved, the promoters will own more than 51 per cent of the company. Their stake may further go up if the warrants are converted.

A proposed restructuring plan, involving the transfer of the ownership of the retail and fashion divisions of the company, will also be taken up at the meeting.

According to the proposal, Pantaloon Retail (India) Ltd will be renamed Future Markets and Consumer Group and will be the new holding company for businesses such as financial services, insurance, logistics, knowledge services and media. It will have a 100 per cent subsidiary — Future Fashion Merchandising Ltd — that will make and distribute fashion products.

Future Fashion will run the group’s fashion and private label businesses and act as a holding company for Future Consumer Enterprise Ltd that will look after the group’s retail business in all formats.

According to managing director Kishore Biyani, the restructuring will create three distinct business segments of fashion, retailing, and FMCG and consumer durables.