Future Group shelves plan to sell stakes in retail formats

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Future Group has put off its plans to sell stakes in some of its retail formats as it has managed to halve its debt burden in one year by selling Pantaloon department store and non-retail businesses.

"We are no longer interested in diluting stake in these formats as debt has come down to a comfortable level", chairman, Future Group, Kishore Biyani told media.

A company source stated that the debt-laden retailer has been devolving stakes in non-core assets in order to cut down its debt of over Rs 8,000 crore since last year.

To achieve the set target of offloading the debt target, it sold majority stake in Pantaloon department store chain to Kumar Mangalam Birla's Aditya Birla Nuvo for Rs 1,600 crore a year ago.

Moreover, it also sold out a major stake in Future Capital Holdings to Warburg Pincus for a huge Rs. 560 crore in 2012.

Some of the industry leaders also came up and commented on the Future Group's latest development.

"In terms of sale of non-core assets, it is currently a buyers' market and sellers are not in a position to dictate terms.

Management's decision to sell one of its core businesses-Pantaloon-shows the seriousness of the company to reduce its debt as Pantaloon format is its highest margin business and has strong brand equity" , associate director at Edelweiss Securities, Abneesh Roy told media.

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Story first published: Tuesday, March 19, 2013, 23:32 [IST]
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