India’s Aditya Birla Group has signed a deal to sell Aditya Birla Retail (ABRL), known for its ‘More’ retail chain, to domestic private equity fund Samara Capital and US e-commerce company Amazon for ₹42 billion. The buyers would take ₹40 billion debt in ABRL. ABRL’s accumulated losses had crossed ₹67 billion in 2016-17 and may have risen further.
ABRL posted losses of ₹6.44 billion in 2016-17, despite sales being up by 20 per cent to ₹41.96 billion.India's Aditya Birla Group has signed a deal to sell Aditya Birla Retail (ABRL), known for its 'More' retail chain, to domestic private equity fund Samara Capital and US e-commerce company Amazon for ₹42 billion. The buyers would take ₹40 billion debt in ABRL. ABRL's accumulated losses had crossed ₹67 billion in 2016-17 and may have risen further.#
The Aditya Birla Group is reportedly expected to end up with losses amounting to ₹70 billion in the venture.
RKN Retail and Kanishtha Finance and Investment, the two holding companies of ABRL, sold almost 100 per cent in the company to Witzig Advisory Services, a back-end company owned by the Samara Alternative Investment Fund. Witzig is reportedly the lead buyer with 51 per cent stake and Amazon has 49 per cent. Both sides did not make any official declaration of their stakes.
Amazon’s financial commitment to the partnership is yet to be known, according to Indian media reports.
As the fourth-largest supermarket chain in India, ‘More’ runs 490 stores and 20 hypermarkets. Kumar Mangalam Birla had launched the venture in 2007 with plans to set up a network of 1,000 stores.
This is Amazon’s second investment in India’s brick-and-mortar retail space after Amazon.com NV Investment Holdings acquired a 5 per cent stake in department store chain Shoppers Stop for about ₹1.80 billion in September last year. (DS)
Fibre2Fashion News Desk – India
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