Flawless Diamond to raise Rs100 crore; spin off retail business
28 May 2009
Flawless Diamond will raise up to Rs100 crore through a mix of equity and debt to fund its expansion. It will also spin off its retail business into a separate fully-owned unit, which will later be listed on the stock exchanges. the company said in a statement.
In a filing with the Bombay Stock Exchange (BSE), Flawless Diamond India Ltd said a meeting of the board of directors of the company will be held on 28 May 2009, inter alia, to discuss the following business:
To discuss transferring the company's retail business into a separate owned subsidiary and also transferring fully or partly the company's designer jewellery business into that company.
The meeting discussed plans to raise the funds in the main company, ie, Flawless Diamond (India) Ltd and/or in the new subsidiary company as also the possibility of getting the subsidiary listed on the stock exchanges as a separate entity in the future.
The board has appointed Bhawar U Jain, managing director, to negotiate with the investors, institutions and banks for the same.
"Global Scenario of diamond market is improving and exports demand has started flowing in the system. Stability in the domestic market will ultimately give a boost to export thrust area like diamond and designer jewellery business which will improve strongly and immediately,'' said Jain. ''Our company has enough strength to take benefit of the given situation,'' he added.
Transferring of the company's retails business into a separate own subsidiary company ''is the better way to de-merge company's retail business of designer jewellery, which will help the company in the long run,'' the company said in statement released after the board meeting.
The board decided to appoint experts to work out the action plan for the spin-off and to list it as a separate entity on the stock exchanges latter. This, the company said, will help unlock value for shareholders.
