Provogue to demerge realty business

Provogue the fashion & lifestyle retail business owned by

Provogue (India) is restructuring its business. The company is demerging its real estate business which will give strategic and private equity investors more liquidity. The demerged biz will be amalgamated with Prozone, backed by UK’s Capital Shopping & Triangle Real Estate India Fund. The apparel retailer, backed by ace investor Rakesh Jhunjhunwala has raised funding for its real estate business from the UK-based Capital Shopping Centres Group (one of the largest REITs focused on shopping centre management and development) and Triangle Real Estate India Fund.

The new entity, to be listed, will be called Prozone Capital Shopping Centres. As per the deal Provogue will transfer its retail-centric real estate development division to Castle Mall, which will amalgamate the business with Prozone Enterprises, a subsidiary of Provogue. While shareholders will get 1:1 share for the demerger, the exchange ratio for the amalgamation is 313:75. The Capital Shopping Centres Group, formerly known as Liberty International Plc, had picked up 25 per cent of equity stake in Prozone Enterprises for Rs 202.5 crores in 2005, valuing the company over Rs 800 crores. Prozone is building retail-centric, mixed-use development projects in Tier II cities like Aurangabad, Indore, Coimbatore and Nagpur.

Provogue is a premier retail-centric company and has grown multifold since its incorporation in 1997. In addition to the fashion brand business, Provogue has its own garment manufacturing facilities in Daman and Baddi, Himachal Pradesh. It operates an office in Hong Kong to manage the sourcing of offshore raw materials. Provogue had extended its retail estate business to the development of regional shopping centres and related mixed-use real estate through its subsidiary, Prozone Enterprises.