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Debt-laden Koutons eyes GDR worth $200M to finance overseas buy

Debt-laden apparel retail firm Koutons Retail India Ltd is looking to raise as much as $200 million (Rs 1,060 crore) through global depository receipts (GDR) to finance the acquisition of an unnamed international firm, as per a stock market disclosure on Tuesday.

It added that the deal could involve payment through issue of GDR instead of cash, which would tantamount to a reverse takeover, given that Koutons itself has a market cap of just Rs 21 crore.

The firm has been looking to restructure its debt and in this context its fund raising plan appears ambitious.

The firm, which once counted few PE firms as shareholders and at one point of time commanded a market cap of around Rs 3,000 crore, has seen its scrip become a penny stock. It had gone public at the peak of stock market bull ride in 2007-08. Earlier, some of its pre IPO investors like Ascent Capital had exited at a loss and some had barely manage to move out at par investment value.

Bulk of the company is now owned by the public with the promoters holding just about 7 per cent, almost entirely pledged with financial institutions.

For the year ended March 31, 2012, Koutons had revenues of Rs 165 crore with net loss of Rs 134 crore. The firm had sunk further and at a standalone level reported revenues of just Rs 3.32 crore with net loss of over Rs 39 crore for the quarter ended September’12.

Started in 1994, Gurgaon-based apparel manufacturing and retail company Koutons designs, manufactures and retails apparel for men, women and children. The firm offers its products under the brand names Koutons, Les Femme, Charlie Outlaw, Koutons Junior and K2one.

(Edited by Prem Udayabhanu)

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