The Board of Directors of Arvind Ltd has planned for the demerger of its branded apparel business and the retail business into wholly owned subsidiaries with effect from April 1, 2009. It was announced in the meeting held on the Nov. 28th
Arvind is one of the largest integrated textile and apparel companies in the world. It has significant presence across the apparel value chain, starting from cotton farming to marketing and retailing leading apparel and accessories brands.
The branded apparel business, which markets apparels and accessories under the brands Arrow, Flying Machine, Newport, Excalibur and yet to be launched brands like Izod, USPA, Pierre Cardin, Sansabelt, Hart Schaffner Marx will be demerged into Arvind Lifestyle Brands Ltd.
Retail business, under the Megamart banner operating about 150 stores across country, along with the license for the worlds largest value brand Cherokee will be demerged into Arvind Retail Ltd.
The demergers will be done with effect from April 1, 2009 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 Ltd., Arvind Lifestyle Brands Ltd., Arvind Retail Ltd. under Section 78, 100 to 103 of the Companies Act.
Speaking on this issue, Sanjay Lalbhai, Chairman and MD of Arvind Ltd., 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."