Witzig Advisory Services, which owns and operates the food and grocery retail chain More, has received an investment of Rs 275 crore from Amazon and Samara Capital, a private equity firm. According to the latest regulatory filings made by both the companies, Witzig, in turn, has invested the amount into More Retail with both the transactions undertaken through a rights issue.
More Retail has reduced its net losses from Rs 499 crore in FY19 to Rs 175 crore in FY20, while its revenue is up by 10 percent at Rs 4,824 crore in 2019-20 as compared to Rs 4,384 crore the year before, as per the filings.
Samara and Amazon have made an investment in Witzig through a mix of ‘Class A’ shares, which have voting rights, and ‘Class B’ shares, which have differential voting rights (DVR). Samara holds a 51 percent stake in Witzig, while the remaining 49 percent is held by two Amazon entities, including Coda Holdings Singapore and Coda Holdings 3 LLC.
Of the 49 percent, Amazon’s voting rights is at 17 percent since it is through Class A shares while the rest 32 percent through Class B shares having no voting rights. This structure was adopted to ensure Amazon's voting rights in Witzig is less than 26 percent to comply with Indian e-commerce regulations so that More can be a seller in the marketplace.
More Retail in the filing said its accumulated losses were Rs 8,105 crore against equity share capital of Rs 7,666 crore as of March 2020. “Basis the projections prepared by the company, the management believes that the net current liabilities of Rs 331.45 crore will be bridged mainly through additional funding by the holding company (Witzig) and internal accruals,” it added.
More Retail operates 623 supermarkets, 22 hypermarkets and was amongst the top four organized food and grocery retailers in India.