After Pantaloon deal, Biyani eyes sale of Future Capital

An announcement on the sale of Future Capital is expected soon, say two people with knowledge of the deal.

Various names have been doing the rounds for the possible buyer. Pantaloon Retail announced that Bennett, Coleman & Company will subscribe to Rs 200 crore preferential shares in the company. It is not clear if this is a separate deal or is related to the sale of Future Capital, which is a subsidiary of Pantaloon Retail.

The Pantaloon board also approved issue of Rs 800 crore worth of optionally fully convertible debentures to the Aditya Birla Group and a change of name of the company to Future Retail India Ltd.

Deccan Chronicle was once the frontrunner to pick up a stake in Future Capital for Rs 700 crore and one person said on Thursday that a media company was the likely buyer without clarifying if it was Deccan Chronicle or Bennett, Coleman. Both the persons requested anonymity.

In the past, media reports have named others such as Barings Private Equity Partners, Dewan Housing and L&T Finance as potential suitors for Future Capital.

Pantaloon Retail, the flagship of the Future Group owns 53.67 per cent in Future Capital, and group promoter Kishore Biyani personally owns 2.62 per cent.

The Future Capital deal will be the second that the Biyanis have announced within a week - aimed at easing the debt burden of the group. The sale of the Pantaloon format business of Pantaloon Retail India Ltd to Aditya Birla Nuvo Ltd was announced on Monday. Pantaloon Retail had Rs 2,826 crore of debt on its books as of December 31, 2011. Future Capital had debt of Rs 2,562 crore as of March 31, 2011. Another chunk of debt is held in the unlisted arm Future Value Retail Ltd.