Future Lifestyle sets up arm; looks to monetise brands

Future Lifestyle Fashions (FLF) Ltd today said it has tranferred its holding in investee brands into a wholly-owned subsidiary FLFL Lifestyle Brands Ltd as part of efforts to raise around Rs 450 crore.

"FLF plans to raise Rs 450 crore by unlocking value in its stake in its investee brands portfolio," the company said in a filing to BSE.

In another filing, the company said that it has incorporated a wholly owned subsidiary company, FLFL Business Services with effect from March 27.

The company said that over the years, it has invested in multiple fashion brands backed by talented designers and entrepreneurs at early stage. FLF acquired stakes ranging from minority to majority in these brands.
 

"FLF believes that each of these brands hold significant value and has immense potential in becoming leading brands in their respective segments," ti said.

In line with company's stated intent of creating value by monetising its holding in these companies, FLF has post shareholders approval on March 24, transferred its holding in these investee brands into a wholly-owned subsidiary FLFL Lifestyle Brands Ltd (FLBL).

Post the transaction, FLF will hold 49 per cent stake in FLFL Lifestyle Brands Ltd. These investee companies will continue to be run independently by their respective entrepreneurs and professionals.

Given the fact that most of these brands are in their early stages of growth, the opportunity to unlock the true potential value from these investments is still a couple of years away. This transaction enables FLF to create value today by partially unlocking value in its stake.

This transaction is intended to adding further value for its shareholders by reducing FLF's debt.

Along with this, a small portion of these funds will also be utilised to nurture and grow these brands. As these investments mature, there is still further significant value creation potential for both FLF and the investors by monetising the stakes in these entities in later years.