Pantaloon to hive off Big Bazaar, Food Bazaar in three months

India's largest listed retailer, Pantaloon Retail India, plans to complete the process of hiving-off Big Bazaar and Food Bazaar into a wholly-owned subsidiary in the next two to three months.

The Kishore Biyani-promoted company will approach shareholders through a postal ballot in the next two months, after its Board on Friday approved spinning-off its Big Bazaar, Food Bazaar and Fashion@Big Bazaar operations.

"The process of realignment has started and should be over in the next two to three months. We will seek shareholders approval through a postal ballot in the next 60 days," Pantaloon Retail (India) Ltd's managing director, Kishore Biyani, told PTI here.

Pantaloon Retail aims to raise funds to fuel expansion through the new subsidiary, which would be named Future Value Retail and governed independently. "Hiving off is not the main thing. We want to unlock more value for the shareholders and be seen as a pure retail player," Biyani said.

The company operates 119 Big Bazaar stores in over 70 cities across the country and plans to expand and operate close to 275 stores by 2014.  

Pantaloon Retail is the flagship company of Biyani's Future Group, which had announced raising Rs 1,200-1,500 crore in April this year. It has so far raised Rs367.5 crore through preferential allotment of shares and warrants in June and plans to raise Rs700-1,000 crore in phases, Biyani said.

The company will raise about Rs190 crore by transferring investment in Future Brands and assets held by non-retail businesses through its subsidiaries like Future Knowledge Services Ltd and Future Learning and Development to PFH Entertainment as a part of the realignment.

"We will raise roughly Rs 200 crore by transferring the non-core business of separate group companies to PFH (Entertainment Ltd). Besides, we are in the process of raising another Rs700-1,000 crore at a group level," Biyani said. He added that fund-raising would take time but the group was considering an IPO of Big Bazaar and was talking to various private equity firms for the same.

Pantaloon Retail is also looking to consolidate investments it made in financial services business of the company, including Future Capital Holdings Limited and Insurance Joint Venture Companies.