Raymond Limited as part of its proposed demerger scheme has modified its brand-related policy in a move to address the concerns raised by certain investors with regard to the proposed royalty payment by Raymond Lifestyle Business to Raymond Limited post the demerger. Raymond consulted with industry and financial experts to arrive at an optimal structure in relation to the ownership of brands related to Lifestyle businesses.
Under the proposed scheme, along with the Lifestyle Business, ‘ Raymond’ and all other brands currently being used in respect of textiles, readymade garments, retail business related to a Lifestyle business , tailoring services and allied accessories will be assigned to and owned by Raymond Lifestyle Business. Consequently, once the proposed scheme is approved by the NCLT, Raymond Lifestyle Business will not be required to pay any royalty to Raymond Limited for its use of the brands. ‘Raymond’ brand ownership for all the other businesses (except for Raymond Lifestyle Businesses) will remain with Raymond Limited.
Commenting on the development, Gautam Hari Singhania, Chairman & Managing Director, Raymond Limited said, “As an organisation, we are pro‐active in addressing the concerns of all our stakeholders and as a routine process, we spoke to our key investors and took cognizance of all the inputs we received from them. I am happy to announce the management’s decision of moving brand ownership with usage categories in respective companies. Consequently, the brand ownership of Raymond for all the Lifestyle-related categories post demerger will be with the demerged new lifestyle company. There will be no intercompany brand licensing rights or royalty contracts.”
Raymond Limited had earlier announced the proposed demerger of its core Lifestyle Business into a separate entity that will be listed through mirror shareholding structure. Every shareholder of Raymond Ltd. will be issued the shares of the new company in the ratio of 1:1. The move will create a clear demarcation of Lifestyle and other businesses leading to the simplification of the Group structure. The proposed scheme is subject to various regulatory and statutory approvals