HYDERABAD: Andhra Pradesh Chief Minister N Chandrababu Naidu’s family has found a rescuer—financial, not political—in Future Retail’s Kishore Biyani.Decks have been cleared for the sale of their Heritage Foods’ retail and bakery divisions to Future Retail, which runs the supermarket chain Big Bazaar.
Sources said the Naidu family decided to go in for the sale as a majority of stores are located in Telangana, mainly Hyderabad. Apart from this, the outlets in Bengaluru and Chennai have not been earning much of profit. “These two reasons forced the Heritage management to gradually withdraw,” a source added.
Future Retail last week announced that its board of directors had approved the proposed consolidation of Heritage Foods’ retail and allied businesses.
Heritage Foods has several divisions—dairy, renewable energy, retail, agri, and bakery—which for the financial year ending 2015-16 recorded a revenue of `2,380.6 crore to which the retail and allied businesses contributed `629.74 crore.
Preparatory to a merger, it will spin off the retail, bakery, agri-sourcing and veterinary care businesses into a fully-owned subsidiary.
This means that the retail business of Heritage Foods, which includes 124 Heritage stores in Hyderabad, Bengaluru and Chennai, will be gradually transferred to Future Retail, for which the latter will issue 1.78 crore equity shares to Heritage Foods retail shareholders.
Biyani and Nara Lokesh, son of Chandrababu Naidu, announced the “proposed consolidation” has been approved.