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| Pantaloon Retail |
Pantaloon Retail has declared that it will sell its stake holding of
around 22.5% in Future General India Life Insurance Company Ltd. (FGILICL) to
the Industrial Investment Trust Ltd. (IITL). However the popular retail company
has not mentioned the valuation at which the sale will happen, in fact not even
the total deal size has been mentioned yet.
The investors of the company would definitely seek more information on
the deal, as it is very much for the company’s financial scenarios. The said
Joint Venture (JV) has already created quite a buzz in the business world of
India. The economy and business market is having a firm watch at the valuation
of the deal.
It’s not new at all, as Pantaloon Retail has been selling off its
various assets for quite a few times now. The retail company basically wants to
reduce its debt, which is quite high at the moment, and for that it had already
sold one of its retail businesses to Aditya Birla Group and its stake in Future
Capital Holding to Warburg Pincus. All these moves would be quite able to
reduce the debt of the company by at least Rs 1600 crore, provided the deal is
completed with no obligation.
To boost up profits it is highly essential to reduce the debt as much as
possible, and the Pantaloon Retail is just trying to do that only. It needs to
control its debt to increase its net revenue on a substantial level. On that
note you may love to know about some Current Economic and Business News of India.
As on December 31 of previous year, the total debt of the company was Rs
5,430 crore, and due to this high debt the interest outgo for the last December
quarter was Rs 178 crore, which is pretty high in deed. Besides that
Pantaloon’s total earnings was only Rs 189 crore for that quarter before
interest and tax (EBIT). It is in the news that Standard Chartered may acquire the Wealth Business ofMorgan’s India. Just like Pantaloon, Morgan India too is suffering a high debt
problem.
It is easily understandable that the company needs to reduce its high
debt and the interest outgo to accelerate its net revenue. Considering the
latest economic scenario of the company it has become a priority thing to do
for sure.
Now the most interesting thing to know will be the amount in which
Pantaloon Retail manages to get for its stakes sell in Future General India
Life Insurance Company Ltd. (FGILICL). It needs to be seen, as it will decide
the factor whether the move would benefit the company or not. It has to be
mentioned here that the stocks of the Pantaloon Retail was indeed up by around
2.9% yesterday.
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