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Reliance - Future Retail Deal Valuation| Final Announcement| RIl-Future Retail Deal Structure
- 2. RELIANCE –FUTURE DEAL ANNOUNCEMENT BY 10TH AUGUST WHY RELIANCE UP BY 7% FINAL TERMS OF DEAL VALUATION STOCK-IN-SPOTLIGHT
- 3. ALL ABOUT RELIANCE FUTURE DEAL • THE DEAL WAS SUPPOSED TO BE ANNOUNCED ON 30 JULY, BUT NEGOTIATIONS GOT STUCK ON WAYS TO TACKLE ONE LARGE CHUNK OF PERSONAL DEBT TAKEN BY BIYANI AS A PROMOTER IN FUTURE CORPORATE RESOURCES • A LARGE LOAN OF AROUND RS2,000 CRORE TAKEN BY FUTURE GROUP-FOUNDER KISHORE BIYANI IN HIS PERSONAL CAPACITY IS ACTING AS A HURDLE BEFORE THE PROPOSED DEAL ENTAILING THE ACQUISITION OF RETAIL AND LIFESTYLE BUSINESSES OF FUTURE GROUP BY MUKESH AMBANI-PROMOTED RELIANCE INDUSTRIES LTD. • TWO PERSONS DIRECTLY AWARE OF THE ONGOING DISCUSSIONS CONFIRMED THIS, ADDING THAT A FINAL DECISION ON RESOLVING THE PERSONAL DEBT ISSUE AND CONCLUSION OF THE RS23,000-CRORE, ALL-CASH DEAL MAY BE TAKEN WITHIN 10 DAYS.
- 4. HOW WILL RIL BUY FUTURE RETAIL….. • FIVE LISTED ENTITIES, INCLUDING FUTURE RETAIL LTD, FUTURE CONSUMER, FUTURE LIFESTYLE FASHIONS, FUTURE SUPPLY CHAIN AND FUTURE MARKET NETWORKS, WILL BE MERGED INTO FUTURE ENTERPRISES LTD (FEL) BEFORE THE SALE OF THE ASSETS, THE PEOPLE SAID ON THE CONDITION OF ANONYMITY. • FEL WILL THEN CONDUCT A SLUMP SALE OF ITS RETAIL ASSETS TO A RETAIL SUBSIDIARY OF RELIANCE INDUSTRIES LTD. • AS OF 30 SEPTEMBER, 2019, DEBT AT FUTURE GROUP’S LISTED COMPANIES INCREASED TO RS12,778 CRORE FROM RS10,951 CRORE AS ON 31 MARCH, 2019. • BIYANI’S 46% STAKE IN FUTURE LIFESTYLE IS ENTIRELY PLEDGED, AND IN FUTURE RETAIL, TOO, THREE- FOURTH OF HIS 42% STAKE IS PLEDGED. • IN JULY, RATING AGENCY FITCH DOWNGRADED FUTURE RETAIL’S LONG-TERM ISSUER DEFAULT RATING TO C AFTER A MISSED PAYMENT OF SEMI-ANNUAL INTEREST ON BONDS. TWO FUTURE GROUP UNITS HAVE ALSO MISSED THEIR PAYMENTS TO FRANKLIN TEMPLETON FUNDS, WHICH ARE WINDING UP. • THE DEAL INCLUDES A TAKEOVER OF FUTURE’S LIABILITIES BY AN RIL SUBSIDIARY.
- 5. RIL-FUTURE RETAIL TACTICS • AS PART OF THE DEAL, FASHION AND GROCERY RETAIL FORMATS FROM LISTED ENTITIES OF FUTURE GROUP, SUCH AS BIG BAZAAR, FOODHALL, NILGIRIS, FBB, CENTRAL, HERITAGE FOODS AND BRAND FACTORY, BARRING APPAREL BRANDS, WILL BE ACQUIRED BY RIL. IN ALL, OVER 1,700 STORES ACROSS FORMATS ARE EXPECTED TO GO TO RIL. • RIL WILL ALSO ABSORB PARTNERSHIPS THAT THE FUTURE GROUP HAS WITH FOREIGN BRANDS AND RETAILERS. • FOR INSTANCE, FUTURE RETAIL HAD SIGNED A MASTER FRANCHISE AGREEMENT WITH 7-ELEVEN INC. TO DEVELOP AND OPERATE 7- ELEVEN STORES IN INDIA. NO STORES HAVE OPENED SO FAR, BUT THE BUSINESS IS EXPECTED GO TO RIL. • RIL IS ALSO LIKELY TO ACQUIRE A MINORITY STAKE OF AROUND 15% IN FUTURE CONSUMER.
- 6. FUTURE RETAIL VS RELIANCE RETAIL • BIYANI BUILT A SIZABLE ORGANIZED RETAIL BUSINESS—SINCE THE LATE 1980S. IN 1991, BIYANI CHANGED THE NAME OF HIS COMPANY TO PANTALOON FASHION (INDIA) LTD. IN 2001, IT OPENED THE FIRST BIG BAZAAR STORE IN INDIA. • RELIANCE RETAIL, ON THE OTHER HAND, OPERATES CLOSE TO 11,784 STORES SPLIT ACROSS VALUE FASHION, FOOTWEAR, PREMIUM FASHION, GROCERY, JEWELLERY, ELECTRONICS, AND CONNECTIVITY, AMONG OTHERS. IN FY20, RELIANCE RETAIL ACHIEVED A TURNOVER OF RS1.63 TRILLION. RELIANCE RETAIL ALSO WORKS AS THE MASTER DISTRIBUTOR FOR JIO CONNECTIVITY SERVICE. • RIL’S MOVE TO CONSOLIDATE PHYSICAL STORE BUSINESS FOLLOWS ITS ATTEMPT TO ENHANCE FOCUS ON ITS E-COMMERCE INITIATIVE JIOMART, WHERE IT HAS ENTERED INTO A COMMERCIAL AGREEMENT WITH MESSAGING APP WHATSAPP TO REACH CONSUMERS. • LAST WEEK, RIL SAID JIOMART HAS REACHED A PEAK OF 4 LAKH ORDERS A DAY ALREADY, AND CLAIMED IT IS NOW THE LARGEST ONLINE GROCER IN THE COUNTRY.
- 7. THANKS • PENNY STOCK PERFORMANCE • MUTUAL FUND MANIA • TRENDING & TRADING • STOCK-IN-SPOTLIGHT • EXPLAINED