VLCC plans to raise $20m

Selling the concept of beauty has paid off for Vandana Luthra Curls and Curves (VLCC). It is now looking to cash in on the good looks of its balance sheet and business model to go in for a private placement to raise $20 million (Rs 90 crore).

Says Mukesh Luthra, managing director of VLCC, "We are looking at going in for a private placement of equity shares to raise $20 million. The placement will be made to private equity funds. We have already received interest from international private equity firms from Australia, Hong Kong and Singapore."

The quantum of stake that the Luthras would divest for raising funds could not be ascertained as Luthra said, "Around 10 days back, the board discussed this issue. We expect the transaction to be completed by the middle of this year."

The VLCC brand is estimated to have a brand value of around Rs 350 crore.

VLCC is the holding company owning the brand rights. It holds stake in Curls and Curves India (CCIL) which manages the fitness and beauty centres, Vandana Luthra Personal Care (VLPC) that markets the personal care products and Vandana Luthra Education and Publishing (VLEP) which looks after the education institutes.

Currently, CCIL contributes 80 per cent to the group's turnover of Rs 60 crore. About 15 per cent comes from VLPC and the balance 5 per cent comes from the institute business.

The group has targetted to achieve a turnover of Rs 100 crore this year.

VLCC is also looking at spreading its wings and plans to open slimming and beauty centres in Dubai, Sri Lanka and England. The group is planning to consolidate its companies under VLCC and may look at tapping the capital market, as part of its long-term strategy.

CCIL currently has around 60 centres. Launched in mid 2002, VLPC has a sales and distribution network comprising over 2,000 retail stores, departmental store chains, beauty salons and the VLCC centres. Its manufacturing facilities are located at Dehradun and Gurgaon.