Pantaloon Retail India has sold a 4.98 per cent stake preferentially to media giant Bennett, Coleman and Company (BCCL) for Rs 70 crore. The number of shares involved is 953,000.
Kishore Biyani, managing director, Pantaloon Retail India, said the deal was just a financing arrangement, and Pantaloon had no plans to link itself with BCCL. “This thing never crossed my mind when we struck the deal with BCCL,” Biyani said.
Apart from its interests in media (it owns the Times of India newspaper), BCCL has a presence in retail sales through the Planet M chain of music stores. The group also holds equity in Mid-Day Multimedia, which owns the tabloid Mid-Day and the FM radio channel Go92.5.
“Our retail chain is on an expansion spree. We decided to opt for this route to meet our fund requirements,” said Biyani.
After this preferential placement, the promoters’ stake in Pantaloon Retail will be down by a percentage point from 39 per cent currently.
The company plans to add more than 1.5 million sq ft of retail space over the next 18 months with a capital expenditure of around Rs 150 crore.
In a notice to the stock exchanges, Pantaloon said the shares had been placed at a premium of Rs 724.02 per share.
The retail company will also be issuing 408,000 warrants worth Rs 30 crore to promoters and their associates. These warrants will give an option to the warrant holder to acquire one fully paid-up equity share of Rs 10 each for cash at a premium of Rs 725 per share for every warrant within a period of 18 months.
Kotak Mahindra Investment Banking was the sole financial adviser to Pantaloon on this deal.
The Pantaloon Retail stock hit a high a Rs 770 on the Bombay Stock Exchange today but closed at Rs 721.35, down from yesterday’s close of Rs 737.85.
The promoters — the Biyani family — hold about 39.53 per cent in Pantaloon Retail India. Institutional investors hold 34.6 per cent and the rest is held by the public, according to data furnished to the stock exchanges on September 30, 2004.
Apart from the Pantaloon clothing brand, the company owns Big Bazaar (hypermarket), the Food Bazaar chain (food retailing) and Central Mall, among others.