Kishore Biyani-led Future Retail is planning to raise up to $500 million (Rs 3,590 crore) to acquire certain in-store infrastructure assets. The funds will be raised via dollar-denominated bonds.
In October last year, the firm had announced the acquisition of the retail infrastructure assets of Future Enterprises Ltd (FEL) for around Rs 4,000 crore.
Future Retail had then said that this will be done through direct purchase or acquisition through slump sale or any other mode as mutually acceptable at a fair value to be determined based on independent valuation.
The company had then said that the acquisition would be done from equity funds and existing credit facilities and that it was not exploring raising fresh funds through equity or debt instruments.
However, at a board meeting held on Saturday, the directors reconsidered the funding options for the acquisition and found it “more efficient to fund the same through dollar-denominated borrowings”, the company said in a filing to the bourses.
Accordingly, the board “approved the raising of long-term funds for the company, subject to applicable regulatory approvals and market conditions, through the offer, issue and allotment of senior, secured dollar-denominated notes for an aggregate amount not exceeding $500 million... to meet the capital expenditure for the acquisition of certain in-store infrastructure retail assets, in one or more tranches”, Future Retail said.
At its meeting, the board also approved “the allotment of 396,03,960 equity warrants at a price of Rs 505 apiece to Future Coupons Pvt Ltd (FCPL) (formerly known as Future Coupons Ltd), a promoter group entity, on preferential basis against the receipt of 25 per cent of warrant subscription price (Rs 126.25 per warrant)”.
For the quarter ended September 30, Future Retail had posted a standalone net profit of Rs 188 crore compared with Rs 175 crore in the same period last year, a growth of 7 per cent. This came on the back of a 9 per cent rise in income to Rs 5,394 crore from Rs 4,929 crore in the year-ago period.
