Future Retail's merger plan meets roadblocks from Sebi: Report

Posted By: Religare
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Future Retail's merger plan meets roadblocks from Sebi: Repo
The market regulator Securities and Exchange Board of India (Sebi) has raised objections on the Kishore Biyani led Future Retail Ltd's proposed manner to merge its fully-owned subsidiary Future Value Retail (FVRL) with itself, according to a media report.

According to an Economic Times report, Sebi has said that the deal will benefit subsidiary's debenture holders at the cost of minority shareholders in the parent as it would lead to dilution of equity.

Future Retail had decided to merge with itself Future Value Retail with effect from July 1, 2012. Also Future Retail's books include Rs 685 crore in the form of compulsorily convertible debentures (CCDs), which is the biggest source of concern for Sebi as it feels that it would benefit the lenders of convertible debt while affecting the interests of minority shareholders of the parent listed entity.

Dion Global Solutions Ltd.

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