Celebrity Fashions to list domestic biz separately

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Celebrity Fashions to list domestic biz separately

In an interview with CNBC-TV18, S Surya Narayanan, Executive Director and Chief Financial Officer of Celebrity Fashions shed light on the scheme of arrangement to demerge the domestic business Indian Terrain.

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The stock of Celebrity Fashions has rallied on plans to demerge its domestic business, Indian terrain.

In an interview with CNBC-TV18, S Surya Narayanan, Executive Director and Chief Financial Officer, Celebrity Fashions  shed light on the scheme of arrangement to demerge the domestic business Indian Terrain.

Q: Could you walk us through with the scheme of arrangements, why you are doing it and what is it that you are going to be ultimately left with and also a ratio?

A: We have two divisions, export division and domestic division. Domestic division is called Indian Terrain. We are looking at demerging our Indian Terrain into a separately listed company. The ratio is 2 shares for every 7 shares shareholders hold in Celebrity Fashion. The objective of the merger is to give a greater focus and specific focus to the areas of business which is a quite different type of concentration because retail, current assets based and brand building is required. So that is the object.

Q: You said that this will help you get better focus, last year you were a loss-making company so in FY11, can we expect Celebrity Fashions to be positive in terms of a bottomline growth?

A: The Indian Terrain separately listed company will have over 100 crore sales with positive profits and EBITDA. Exports is continued to be a challenge, so we are working hard to look at what the base at which we can improve the business. So exports will have a marginal growth in terms of sales and Indian Terrain will have a robust 25% growth from the current year.

Q: Can you divide what Indian Terrain does in terms of revenues, what the remaining business does in terms of exports and what is the plan post this demerger, is there any plans of listing Indian Terrain and keeping Celebrity Fashions listed as the export business, can you go through the fineries for us?

A: Indian Terrain - last year we did Rs 80 crore revenue, this year we are looking at over Rs 100 crore. Exports last year we did around Rs 210 crore, and this year also we are looking at around the same levels. Indian Terrain will be a separately listed company. So Celebrity Fashions also will continue to be listed and our bottoms division will become a subsidiary of Celebrity Fashions which is Celebrity Clothing Ltd.

Q: When would this scheme of arrangement be completed by what sort of ballpark figure are we working with for a listing of Indian Terrains?

A: We have secured a shareholders' approval as well as our bank's approval. We have filed the scheme in the court, so we are expecting that by the end of September the court will be approving it.

Q: Could you help us with how you are going to be breaking up your debt?

A: Rs 50 crore of debt will be with Indian Terrain and around 150 crore will be with exports.