Mitsubishi eyes Big Bazaar

Future to close four deals by month-end.

As a pre-condition to invest in Future Group’s food sourcing and back-end infrastructure, Mitsubishi has asked to a stake in Big Bazaar. The two companies discussed the same last week and Mitsubishi recommended a convertible structure that would allow an equity exposure in Big Bazaar, as and when foreign direct investment was allowed in multi-brand retailing

Talks with Mitsubishi and Lawson have been going on for close to a year now for a strategic alliance. The structure would involve creating a new holding company where Future Group’s stakes in various sourcing and back-end operating companies would first get transferred; Mitsubishi would then pick up a significant stake, which could even be a controlling one.

Kishore Biyani is in the middle of accomplishing five-six similar transactions with other strategic retailers, domestic conglomerates, PE funds and high net-worth individuals for the disparate pieces of his retail empire to reduce the group’s debt further. The debt is expected to come down by Rs 1,600 crore and save over Rs 700 crore annually in interest outgo.