New Delhi: The board of directors of FSN E-commerce Ventures, in a board meeting on Tuesday, has considered undertaking group businesses restructuring initiatives to achieve various strategic objectives, the company said in a regulatory filing.
According to the filing, the key objective of these initiatives is to bring operational synergies by streamlining business operations and placing them with the entity that carries the relevant expertise and consolidation of owned brands business in the company which is aimed to be completed over a period of time.
The funds invested will be utilised towards the repayment of loans given by FSN E-commerce to Nykaa Fashion.
Since Nykaa Fashion is a wholly-owned subsidiary of the company, this transaction is being conducted at ‘arm’s length’. As per the regulatory filing, the company is making strategic investment for providing long term funds to Nykaa Fashion.
The investment is expected to be completed by March 31, 2024. On completion of the said transaction, it will continue to remain a wholly owned subsidiary of the company.
Further, the board of the company has approved the acquisition of the athleisure and lingerie business of Nykaa Fashion as a going concern on a slump sale basis, in accordance with the business transfer agreement (BTA) to be entered between FSN E-commerce and Nykka Fashion on an arm’s length basis.
As per the filing, the cost of acquisition is Rs 229 crore.
Also, the company’s board has approved the scheme of arrangement between FSN Distribution (demerged company) and Nykaa E-Retail (resulting company), for demerger of e-b2b business from FSN Distribution into Nykaa E-Retail, under sections 230-232 of the Companies Act, 2013 and rules and regulations made thereunder (Demerger).
FSN Distribution and Nykaa E-Retail are wholly owned subsidiaries of FSN E-commerce Ventures. The scheme as aforesaid is subject to the necessary approvals by National Company Law Tribunal, shareholders and creditors of the both the companies and such other regulatory approvals as may be required.