Our Bureau E-commerce major Amazon India has begun talks with the RP-Sanjiv Goenka Group to pick up a stake in Spencer’s Retail, according to sources. Spencer’s is currently a wholly-owned subsidiary of the group’s flagship CESC Ltd.
The market is also abuzz about Alibaba showing an interest in Spencer’s, which the latter has denied. “We do not comment on market speculations,” said an RP-Sanjiv Goenka Group spokesperson. Amazon did not respond to queries till the time of going to press.
A Samara Capital- Amazon consortium recently bought out hypermarket chain More from Aditya Birla Retail.
Spencer’s, which operates primarily through the hypermarket format, recorded a net loss of ₹129 crore on a turnover of ₹2,012 crore in FY17. It attributed the losses to a rapid network expansion.
The RP-Sanjiv Goenka Group has, in the past, maintained that it would look for partners in the back-end, an area where Amazon may fit the bill.
The talks come at a time when the RP-Sanjiv Goenka Group is on course to demerge Spencer’s from CESC.
On Friday, CESC announced the demerger of its non-power investments into two new companies. Spencer’s will be demerged into RP-SG Retail Ltd. Other non-power ventures including IT company Firstsource Solutions Ltd will be clubbed under RP-SG Business Process Services Ltd.
The shareholders of CESC will be allotted additional six shares of ₹5 each in RP-SG Retail and two shares of ₹10 each in RP-SG Business Process for every 10 shares of CESC. The record date for the demerger is October 31.
The scheme is based on the company’s proposal in May 2017, which received NCLT approval last week.
According to a CESC release, the demerger of its power business into distribution and generation — as proposed in the original scheme — is pending approval from the West Bengal Electricity Regulatory Commission.
Source: The Hindu