Aditya Birla Group has decided to merge two of its arms — the Aditya Birla Nuvo-owned fashion retailing business with Pantaloons Fashion & Retail — to create a Rs 12,000-crore (nearly $2-billion) branded apparel . the new entity will be Known as Aditya Birla Fashion & Retail (ABFRL), it would be the largest not only among listed branded apparel retail companies but also in the non-listed space.

Under the scheme of arrangement, approved on 3rd May 2015 by the boards of the respective companies, Madura Fashion, the branded apparel retailing division, and Madura Lifestyle, the luxury branded apparel retailing of Aditya Birla Nuvo, will be demerged into its listed subsidiary — Pantaloons Fashions and Retail (PFRL), which will be renamed ABFRL.

Post restructuring, the new entity ABFRL will have 1,869 stores across India with revenues of Rs 5,290 crore and debt of Rs 1,775 crore.

Group has created a structure where shareholders of ABNL will get a direct shareholding in the apparel business through ABFRL.

According to the swap-ratio –

• Price Waterhouse and Co LLP and Bansi Mehta and Co — shareholders of ABNL will get 26 new equity shares of PFRL for every 5 equity shares held in ABNL, pursuant to the demerger of Madura Fashion.
• Shareholders of MGLRCL will get 7 new equity shares of PFRL for every 500 equity shares held in MGLRCL, pursuant to the demerger of Madura Lifestyle.
• Preference shareholder of MGLRCL will get 1 new equity share of PFRL.

The transaction, which is subject to corporate and regulatory approvals, is likely to be completed in next 6 to 9 months.