Alok Industries to raise funds by selling its properties

Alok Industries plans to raise around Rs 2,000 crores over the next two years by selling its Store 21 and land in Mumbai, Vapi and Silvassa. To begin with, it would sell its land in Mumbai over the next six months expecting to raise at least Rs 300 crores.

Next on agenda is to scout a buyer for its UK retail chain, Store 21, for which it has appointed investment bankers to negotiate the deal. Keeping the expansion plans aside for the moment, the company would focus on selling all its non-core assets to get rid of Rs 20,000 crores debt on a consolidated level. Its standalone debt stands at Rs 16,000 crores. As a part of its strategy, the company began shutting down its India retail venture, H&A, a couple of years ago.

The company has also inked a strategic alliance with US-based Next Creations to market its products in the US, as well as in other countries. Next Creations has set up a wholly-owned subsidiary, Next Creations Singapore, to exclusively market Alok Industries' products abroad.

Recently, Alok Industries availed of a long-term export advance on an export performance bank guarantee limit of Rs 9,800 crores. This is expected to help the company reduce its interest cost. In FY14, it paid Rs 2,496 crores as interest, while its operating profit stood at Rs 4,693 crores. For the quarter ended September this year, it paid Rs 559 crores as interest costs, up 24 percent year-on-year.