Kishore Biyani sold Stakes in Future Capital & Future Generali Life to Deccan Chronicle & IITL

Retail entrepreneur Kishore Biyani exited his financial services through two separate transactions worth over Rs 1000 crore.

Hyderabad-based sports and media company Deccan Chronicle acquired the stake owned by Biyani’s flagship firm, Pantaloon in Future Capital Holdings. The deal is estimated to be worth Rs 600-700 crore.

In a separate transaction, Mumbai-based Industrial Investment Trust ( IITL) purchased Pantaloon's 26% stake in its insurance joint venture Future Generali Life for Rs 250-300 crore.

Both the transactions were all-cash deals. The transaction and cash infusion is expected to provide relief to debt laden Pantaloon after hopes of a stake sale in the company to a foreign retail giant were dashed. Pantaloon's hopes of a stake sale were dashed after the government put on hold its recent decision to open up multi-brand retail to global chains.

The Future group had planns to use the group's vast retail presence to sell financial services products, but the model ran into trouble after the financial sector meltdown in 2008. The businesses, especially life insurance, required constant capital which Pantaloon was unable to provide due to increasing competition and margin pressure in the core retail business.

Pantaloon's standalone debt stood at Rs 2173 crore at the end of June 2011. Consolidated debt was at Rs 7846 crore compared with Rs 4352 crore in 2010.