ICICI arm picks 54% in Arvind Brands

ICICI Emerging Sector, the private equity arm of ICICI Bank, has acquired a 54 per cent stake in the Bangalore-based Arvind Brands, the apparel arm of the Sanjay Lalbhai-promoted Arvind Mills, for an undisclosed price.

Arvind Mills has informed the Bombay Stock Exchange that as a result of this transaction, Arvind Brands has ceased to be the subsidiary of Arvind Mills.

Darshan Mehta, president, Arvind Brands said: "There has been a fresh issue of equity shares to ICICI Emerging Sector. The funds will be used to pay off the debt of the company."

Mehta, however, declined to divulge details about the total debt of Arvind Brands as well as the valuation of the deal. ICICI executives were unavailable for comment.

ICICI will nominate two people to the board of Arvind Brands.

Arvind Brands was hived off into a separate company in early 2000. The company is expected to clock a turnover of Rs 270 crore (Rs 2.70 billion) in 2003-2004.

Arvind Brands along with its two subsidiaries, Arvind Clothing and Arvind Fashions, is engaged in the business of marketing branded garments.

The main brands that contribute to Arvind Brands' turnover are Arrow, Lee, Wrangler, Excalibur and Newport.

Arvind Brands holds the exclusive marketing rights for international apparel brands like Arrow, Lee and Wrangler.

It recently entered into a tie-up with the Tommy Hilfiger apparel brand. Its own brands are Excalibur, Newport, Bay Island, Ruggers and Flying Machine.

The private arm of ICICI Bank has an exposure in several apparel and retail companies like Shoppers Stop, Pantaloon Retail and Indus League, makers of Scullers and Indigo Nation apparel brands, among others.

Arvind Brands recently relaunched its low-end apparel brand Ruf & Tuf in the market. For this, it has entered into a tie-up with the Biyani-promoted Pantaloon Retail India, whereby the denim wear brand will be sold only at the latter's Big Bazaar outlets across the country.

Arvind Brands on a consolidated basis has reported an EBIDTA of Rs 3 crore (Rs 30 million) for the period ended March 31, 2003 compared to a negative EBIDTA of Rs 34 crore (Rs 340 million) for the six month period ended March 31, 2002.

ABL reported a net loss of Rs 42 crore (Rs 420 million) for the period ended March 31, 2003 compared to a net loss of Rs 68 crore (Rs 680 million) for six months ended March 31, 2002 -- a reduction of 38 per cent.