Textile conglomerate Arvind Limited announced that it has divested its minority stake of 40 per cent in VF Arvind Brands Private Limited (VFABPL) to VF Mauritius for Rs 257 crore. Arvind had a joint venture with VF Corp for marketing brands like Lee and Wrangler.
According to Jayesh Shah, director and chief financial officer, Arvind Ltd. the divestment was done in terms of the joint venture agreement in which VF had right to acquire shares from Arvind at end of 5 years.
VFABPL which is engaged in marketing products under the brands Lee and Wrangler was formed in September 2006 with 60:40 shareholding between VF Mauritius and Arvind. Arvind had invested Rs 5.47 crore in capital of the JV.
Commenting on the divestment, Shah said, "We had a rewarding association with VF. In the last financial year our share of revenue of the JV was approximately Rs 120 crore which constituted slightly less that three per cent of our consolidated revenue. Arvind plans to utilise cash flow received from sale of the JV in reducing its debt."
Arvind is a leading player in apparel brands and retail space with 21 international and Indian brands which generate turnover of over Rs 1200 crore this financial year and growing at over 40 per cent.
It also has a 50:50 joint venture with Tommy Hilfiger for India.