Arvind to demerge businesses
29 November 2008
Arvind Limited, the textile and apparel company, will be demerging its branded apparel and retail business which operates under the MegaMart brand into wholly owned subsidiaries from 1 April 2009. The branded apparel business which markets Arrow, Flying Machine, Newport , Excalibur and yet to be launched brands like Izod, USPA, Pierre Cardin, Sansabelt and Hart Schaffner Marx, will be demerged into Arvind Lifestyle Brands Limited.
The retail business which operates under the banner of MegaMart will be demerged into Arvind Retail Limited. Under the MegaMart banner, Arvind presently has about 150 stores across the country along with the license for world's largest value brand Cherokee.
Arvind Limited chairman and managing director Sanjay Lalbhai said, "We are proposing the demerger of brands and MegaMart business into separate wholly owned subsidiaries to bring enhanced financial focus on these entities and look at possible alternatives for fund raising in these vehicles at an appropriate time in future.''
According to a company press release, the demergers will be done through a court approved scheme and the company would be filing the requisite documents with appropriate authorities at the earliest. The demerger proposal is to be carried out under the Section 391 to 394 of the Companies Act along with a proposal for reduction and restructuring of share capital of Arvind, Arvind Lifestyle Brands, Arvind Retail under Section 78, 100 to 103 of the Companies Act.