Provogue India to Demerge Realty Biz

Provogue (India) Ltd is restructuring its business by demerging its real estate business in a move which will give strategic and private equity investors more liquidity. 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 move is similar to that of Agre Developers, which was demerged from Pantaloon Retail (India) Ltd last year, to focus on retail real estate,infra-logistics parks and development of wholesale markets. Under the deal, Provogue will transfer its retail-centric real estate development division to Castle Mall Pvt Ltd, which will amalgamate the business with Prozone Enterprises Pvt Ltd, a subsidiary of Provogue.

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 Crore in 2005, valuing the company over Rs 800 Crore. Prozone is building retail-centric, mixed-use development projects in tier II cities like Aurangabad, Indore, Coimbatore and Nagpur.