Works on 18 disinvestment and fund raising transactions.
Future Group is working towards nearly 18 divestment and fund-raising transactions simultaneously, including inducting a strategic partner in its flagship Big Bazaar stores. These deals are being looked at, as the group wants to kill its near Rs 7,800 crore debt and put finances back on track.
Kishore Biyani, Chairman, Future Group, said, “We are working on 18 deals and expect to consummate many of the transactions early next fiscal. We will be a zero-debt company by March 2013. We need to streamline operations, enhance our focus on food and fashion, and reduce our focus on furniture and electronics.”
According to the Future Group chairman, more than a third of the group's Rs 7,800-crore debt resides in Future Capital, a non-banking finance company. Pantaloon Retail, the group's flagship listed entity, has a debt of Rs 2,500 crore and its wholly owned arm Future Value Retail has borrowings of Rs 2,500 crore more.
The financial restructuring plan includes merging the eZone electronics retail chain with a Noida-based services company as well as bringing in financial and strategic partners for HomeTown, its furniture retail chain.
With these two transactions, the group aims to reduce the debt of Pantaloon Retail by around Rs 600-700 crore. Future Logistics, a group firm that manages logistics for the group as well as other companies, is looking to raise Rs 800-1,000 crore from private equity funds. For this the company is in talks with three PE funds and likely to finalise the deal in next two months.
The group further plans to raise Rs 2,500-3,000 crore by selling a minority stake in Future Value Retail.
Biyani is also likely to unlock shareholder value in Future Ventures, which has invested in three dozen brands, including Biba, Indus League, Celio and Indigo Nation. During the first half of the financial year ending June 2012, the group's profit from the core retail business, including Pantaloon Retail and Future Value Retail, shrank to Rs 47 crore from Rs 90 crore over the year ago period. This was largely due to interest payout from the retail business increasing to Rs 289 crore from Rs 201 crore.
Pantaloon Retail's turnover increased marginally to Rs 5,816 crore during the same period, up from Rs 5,353 crore.