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Biyani sells Future Capital to Deccan Chronicle for 700cr; Garners another Rs 300 cr from sale of 26% holding in Future Generali Life to IITL

07 Dec 2011 Evaluate

Retail entrepreneur Kishore Biyani will seek to put an end to his troubles by exiting the business through two separate transactions worth over Rs 1,000 crore. Deccan Chronicle will buy the stake owned by his flagship firm, Pantaloon, in Future Capital Holdings in a surprising and unexpected diversification for the Hyderabad-based sports and media company. The deal, estimated to be worth Rs 600-700 crore, has been concluded and is likely to be announced shortly. In a separate transaction, Mumbai-based Industrial Investment Trust (IITL) has purchased Pantaloon’s 26% stake in its insurance joint venture Future Generali Life for Rs 250-300 crore. Both the transactions are all-cash deals.

The transaction and cash infusion will provide relief to debt laden Pantaloon after hopes of a stake sale in the company to a foreign retail giant were dashed. Pantaloon’s standalone debt stood at Rs 2,173 crore at the end of June this year. Consolidated debt was at Rs 7,846 crore compared with Rs 4,352 crore last year. Interest outgo in September was Rs 210 crore, or 80% of the earnings before interest and tax. The interest paid by the company in the past one year has risen by 70%.

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