In a bid to unlock the value and raise fresh resources through listing, the $700 million GHCL has restructured its three business – retail, home textiles and soda ash.
As per the scheme of arrangement being approved by the board of director of GHCL, the soda ash will continue in the existing listed entity while retail and home textile will be hived off into two separate entities. Since it is not vertical de-merger, and the businesses of two divisions have been hived off into two separate companies, which will be wholly owned by GHCL, these subsidiaries would not be listed on the stock exchanges as part of this restructuring exercise.
The Home Textile business of sourcing and manufacturing is proposed to be shifted to 100 per cent subsidiary of GHCL Ltd. The Retail entity would have the business of India and UK retail ventures. The plan envisages shifting the business of Rosebys UK to the 100 Retail subsidiary in India.
Sources, however, said that the company is planning to list its retail business in India in the next six months. “The expansion plan of retail business needs fresh funds and it would be funded through raising fresh equity issues or through a combination of offer for sale by the promoters – GHCL and fresh issue,” sources said.
Speaking on the initiative,. Sanjay Dalmia, Chairman GHCL Said, the restructuring would lead to creation of independently focused organizations with a potential to achieve fast growth in their individual arenas. “It would provide enhanced financial flexibility to the businesses in order to independently raise resources for their future growth requirement and unlock potential valuations for the shareholders,” he said.
Dalmia added further that given the length and breath of its presence in the UK and the brands company services within its retail outfits, the Retail entity should offer a value unlocking proposition for its shareholders.
The company at present is in the final stages of launching its retail in Indian market through the Rosebys brand. The company is set to launch its exclusive range of home textiles retail chain stores in the country. Effective launch of the product range is expected to roll out in early next quarter.
GHCL had acquired three companies in the USA apart from the largest Home Textiles Retail chain of the UK with more than 300 stores across UK operating under the brand name of Rosebys. The US acquisitions included Dan River, HW Baker & Best Textiles primarily catering to B2B segment.