“Due to circumstances post the corona pandemic, both companies agreed that a mutual termination was in both companies best interest. As next steps, both companies will work out modalities regarding transition of the Gap business,” the company informed the exchanges on Tuesday.
Arvind Lifestyle Brands Limited, has appointed an Investment Bank to find a buyer for the Gap business. The Gap business delivered revenues of Rs182cr (4.7% of AFL's consolidated turnover) with a PBT loss of Rs34cr in FY2020.
CARE reaffirms ratings
Meanwhile, CARE Ratings has reaffirmed the credit ratings on the bank facilities of Arvind Fashions Limited.
Long-term credit rating remain CARE A- (negative outlook) while short-term rating has been reaffirmed as CARE A2+
“While business is indeed impacted adversely due to Covid, rating agency took note of the strong actions taken to reason handle the crisis, structural actions taken to manage the business post crisis and the fund raise to deleverage the balance sheet and to meet the cash losses during the crisis,” the company reasoned.
Arvind Fashions Ltd is currently trading at Rs123.50, down by Rs1.15 or 0.92% from its previous closing of Rs124.65 on the BSE.