The board of directors of FSN E-commerce Ventures announced in a regulatory filing that it has deliberated on implementing restructuring initiatives for its group businesses during a board meeting on Tuesday.
The primary aim of these measures is to achieve strategic objectives by creating operational synergies through the rationalisation of business operations and assigning them to entities with relevant expertise.
The company plans to consolidate its owned brands business over some time.
The board also approved additional investment in Nykaa Fashion by means of equity on a rights issue basis. The funds from this investment will be used to repay loans extended by FSN E-commerce to Nykaa Fashion.
Since Nykaa Fashion is a wholly-owned subsidiary, the transaction is being conducted at an ‘arm’s length.’ The strategic investment is intended to provide long-term funds to Nykaa Fashion, with completion expected by 31 March 2024, while Nykaa Fashion will continue to be a wholly-owned subsidiary.
Moreover, the board sanctioned the acquisition of Nykaa Fashion’s athleisure and lingerie business as a going concern on a slump sale basis, in line with the business transfer agreement (BTA) between FSN E-commerce and Nykaa Fashion.
The cost of acquisition for this business is reported to be Rs 229 crore.
In addition, the board approved a scheme of arrangement between FSN Distribution (demerged company) and Nykaa E-Retail (resulting company) for the demerger of the e-b2b business from FSN Distribution into Nykaa E-Retail.
Both FSN Distribution and Nykaa E-Retail are wholly-owned subsidiaries of FSN E-commerce Ventures. The proposed scheme is subject to approvals from the National Company Law Tribunal, shareholders, creditors of both companies and any other necessary regulatory approvals.
