Heritage Foods Ltd said that Future Retail Ltd will issue and allot 1,78,47,420 equity shares of Rs 2 each to the equity shareholders of Heritage Foods Retail Ltd.
In a regulatory filing made with the BSE, the Hyderabad-based diary-cum-retail company, which announced a deal to divest its retail business to the Kishore Biyani-promoted retail major Future Retail Ltd, stated that these shares amount to 3.65 per cent of shareholding in the latter.
Heritage Foods Retail Ltd is a wholly-owned subsidiary of Heritage Foods Ltd. It will issue 1,40,00,000 equity shares of face value of Rs 10 each to Heritage Foods Ltd.
The company informed that the retail, bakery and agri verticals along with respective assets and liabilities shall be transferred on a going concern and as a slump sale mode to Heritage Foods Retail Ltd.
The demerged entity shall be transferred to Future Retail Ltd.
Turnover of the demerged retail entity as of March 31, 2016 was Rs 636 crore. This includes Rs 580 crore from the retail business, Rs 6 crore from bakery division and Rs 50.78 crore from agri segment.
Providing the rationale for such a deal with Future Retail, Heritage Foods said it will facilitate each business to be effectively integrated for achieving growth, unlocking of value and bringing synergies in cost savings in marketing, selling and distribution expenses for Future Retail Ltd.
The company further informed that the transfer of assets will be completed within 6-8 months.
Heritage Foods shares were trading at Rs 893, up 1.52 per cent on the BSE.