Talwalkars Better Value Fitness hiving out lifestyle business

The board of directors of Talwalkars Better Value Fitness (TBVFL) has approved demerger of its lifestyle business. Post demerger there will be two companies, viz. TBVFL and Talwalkars Lifestyles (TLL).

The company will be demerged into two companies w.e.f. April 1, 2016, i.e. gym company and lifestyle company. The shareholders of TBVFL will get equal number of shares in TLL, i.e. in the ratio of 1:1. After receiving respective approvals from various regulatory authorities, the shares of TLL and TBVFL will be listed on the NSE and BSE.

On the financial front, TBVFL earned about 80.15 per cent from the gym company amounting to Rs 204.3 crore and 19.85 per cent from lifestyle amounting to Rs 50.6 crore in FY16. The company’s gym business contributed about Rs 106.9 crore and lifestyle contributed about Rs 34.8 crore in FY16.

TBVFL’s gym segment's cash flow positive and therefore it is self-sustained and well-poised for future growth. As per the company’s management, post the demerger the financial parameters will improve significantly. The company's debt will be reduced as debt for the property, club and for the other non-gym business will be transferred to the lifestyle company, thus improving the debt to equity ratio.

The share price of TBVFL increased by 0.46 per cent on the bourses and closed at Rs 239.3 on intraday basis.