RIL pays Rs 254 cr to Metro for using its brand name in India
Reliance Industries has paid ₹254 crore to Metro AG in the financial year ended September 2023 for using the German retailer's brand name in India after acquiring its wholesale chain in the country a year ago.
«Metro AG is providing certain transitional services and licences as part of the transaction to enable the new owner to operate the business. As part of the sale of Metro India, a licence payment of ₹28 million (₹254 crore) received in advance for using the Metro brand is recognised in the financial year,» Metro said in its latest annual report.
Last December, Reliance Retail Ventures, a unit of RIL, bought Metro Cash & Carry India for a total cash consideration of ₹2,850 crore. The deal included all 31 wholesale stores and the entire real estate portfolio of six store locations.
The sale was completed in May 2023. The wholesale and retail giant said due to the increasing level of market consolidation, accelerated digitalisation and intense competition, Metro India's business is no longer aligned with its core growth strategy.
Metro, in the report, said considering the outgoing cash and including the prepayment for use of the Metro brand, the preliminary net cash inflow for the disposed assets and liabilities amounts to ₹0.3 billion (₹2,731 crore).
«However, positive Ebitda-effective earnings from disposal of its Indian business was ₹150 million (₹1,363 crore), including transaction costs,» it added.
