The NCLT approval facilitates the separation of demerging entity Raymond Ltd and Raymond Lifestyle, which will be the transferee company, with Ray Global Consumer Trading also being integrated into the new structure.
As part of this restructuring process, Raymond Ltd will demerge its lifestyle business into Raymond Lifestyle. Ray Global Consumer Trading will be amalgamated into Raymond Lifestyle to streamline the group structure.
ET Bureau
Swap Ratio
Once the restructuring scheme becomes effective, shareholders of Raymond Ltd will receive four equity shares of Raymond Lifestyle for every five shares held in Raymond Ltd. Shareholders of Ray Global Consumer Trading will receive two equity shares of Raymond Lifestyle for each share held in Ray Global Consumer Trading. Equity shares of Raymond Lifestyle will be listed on the stock exchanges.
Advocate Hemant Sethi and Devanshi Sethi of Hemant Sethi & Co, while appearing for all the companies argued that each of these business verticals are significantly large and mature and have a distinct attractiveness to divergent sets of investors, strategic partners, and other stakeholders.
“Each business will be able to target and attract new investors with specific knowledge, expertise and risk appetite corresponding to their own businesses,” argued the lawyers for the company. “Thus, each business will have its own set of like-minded investors, thereby providing the necessary funding impetus to the long-term growth strategies of each business.”
Shareholder Value
According to the companies’ petition to the NCLT Mumbai bench, the primary objective of the restructuring is to unlock the potential value of Raymond’s distinct business verticals. The textile and lifestyle segments have grown significantly, warranting independent management and operations. The separation is expected to enable focused management of each business vertical, enhance operational synergies, and streamline the corporate structure.
The move will also help attract targeted investments from stakeholders with specific interests and expertise in the respective industries, also help enable maximise shareholder value by creating two distinct, and publicly listed entities.
Raymond Ltd, known for its operations in textiles and branded apparel, as well as its ventures into real estate development, aims to achieve zero net debt for both lifestyle and non-lifestyle businesses post-restructuring. The move is anticipated to simplify operations, enhance management efficiency, and provide a clear strategic direction for each business unit, the companies said.
The appointed date for the demerger is set as April 1, 2023, and the effective date will follow the filing of the NCLT order with the respective Registrar of Companies (ROC). This restructuring is expected to help position Raymond Lifestyle as a key player in the consumer goods sector, with a distinct focus on lifestyle products and fast-moving consumer goods markets.
