The family behind Benetton looks all set to take full control of the fashion group, but the same cannot be said for Indian manufacturing firm Escorts Group – reports that the controlling Nanda family is increasing its stake in the business are “completely false”.
According to a spokesman for the Indian family business, a merger of the group’s subsidiary companies “is happening”, but the “Nanda family is not upping its stake”.
His comments follow reports in the Indian media that Escorts Group is bringing together three of its divisions to create a new trust – a move that will reportedly see the family’s voting stake rise to more than 41% from its current 30.4%.
But the spokesman told CampdenFB the trust will be “controlled by independent directors and not the family”. “The beneficiary of the restructuring is not the Nanda family, but the company.”
Escorts Group, founded in 1944 by brothers HP Nanda and Yudi Nanda, manufactures tractors and a range of construction equipment such as cranes and forklifts. The spokesman added the restructuring, currently being scrutinised by legal authorities, was for the “long-term economic interest of the company”.
“It will add 1,000 crore Indian rupees [€155 million] to the topline, and will build a profitable and larger company.”
Despite the expected restructuring, the Nanda family’s equity stake will remain at 27.57%, while their voting rights will also not increase, he added.
While the Indian family’s control over the company remains subject to speculation, Italian counterpart Edizione, the family holding company that controls Benetton, has increased its ownership of the fashion group.
According to a filing by the Ponzano Veneto-based group, the family, through Edizione, has increased its stake to 95.24% from 94.90%.
The rise of stake follows an announcement earlier this year that the family is looking to take the company private. Founded in 1965 by current chairman Luciano Benetton, the group, which owns the eponymous retailer as well as brands including Sisley and Playlife, has shares listed on the Milan Stock Exchange.
Having reached the 95% mark, the family can now exercise its right to buy out the remaining shares held by minority stockholders, the filing added.