ADM Capital to invest $107 mn in textile firm S Kumar’s and retail arm Brandhouse

Hong Kong-based private equity firm ADM Capital is investing $107 mn into textiles firm S Kumar’s Nationwide Limited and its retail arm Brandhouse Retail. ADM will invest $82 mn to acquire a 10% stake in S Kumar’s and $25 mn will be invested in Brandhouse Retail for another 10% stake in the company. S Kumar’s will issue convertible warrants to ADM Capital. The deal values the S Kumar’s share at Rs. 82.5, while the Brandhouse Retail share has been valued at Rs. 85. S Kumar’s will utilize $30 mn to repay lenders, while $52 mn will be used to fund capital expenditure plans.

S Kumar’s is a Mumbai-based Rs. 1000-crore textiles and apparel conglomerate. It operates in the worsted, ready-to-wear, consumer textiles, home textiles segments. Brandhouse Retail, which was de-merged from S Kumars, will utilize the entire $25 mn to fuel growth plans. It is also expected to be listed on the exchanges as a separate entity by August. Brandhouse will invest Rs. 400 crores to open 1000 stores across the country over the next three years. It owns and operates S Kumar’s apparel and textile showrooms and manages international brands such as Dunhill, Escada and Stephens Brothers.

Read more in the DNA Money article.
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S Kumar’s retail venture to go public in 3-4 months

Brandhouse Retail, the retail venture of S Kumar’s Nationwide Limited (SKNL), is planning to go public in the next 3-4 months. This follows the SKNL board decision to buy Brandhouse Retail for a consideration of Rs. 12.95 crores and then hive it off as a separate entity. The company was also open to the idea of diluting a stake to private equity investors.

Brandhouse Retail manages exclusive brand outlets for SKNL brands as well as key international brands coming to India. Brandhouse Retail is in the midst of a Rs. 400 crore-expansion which would see a total of 1200 outlets being set up by 2010. The company plans to cross 100 outlets by the end of this fiscal and 400 by the end of next fiscal. Out of the total of Rs. 400 crores needed as per the capex plans, Rs. 100 crores would be raised from internal accruals and promoters. The rest would be funded through a mix of debt and equity.

Read The Economic Times article.