FRL - encashing 'children'

Future Retail (FRL), a company owned by Kishore Biyani, is having debt of over Rs.4,000 crore, due to which large part of its margins are going away for servicing this huge debt. In the past, the company had exited from non strategic and non related business, by monetizing its stakes held in such ventures. But, substantial portion of debt still exist in the books of the company.

Kishore Biyani has found a way of monetizing a part of the baby of FRL, viz. Future Supply Chain, a logistic company, operating 5 million sq. feet of warehouse space and handling 3 lakh tonne of goods every month, to over 214 routes. This logistic company also has investors like Li & Fung Group of Hong Kong.

An amount of Rs.700 crore is being planned by FRL, with part stake sale, via an IPO of this logistic company. This will give some breathing space to FRL in the form of reduced debt with lower interest bird, coupled with listing to the logistic company of the group. “Ab bacche bhi kamane lage.”