L Capital withdraws Lilliput bid

LVMH private equity arm L Capital has withdrawn its buyout offer for the Indian kidswear brand Lilliput citing differences over deal details and valuations.

Lilliput founder Sanjeev Narula said while L Capital intended to acquire Lilliput’s manufacturing, retail and export business in March, it has now decided due to the economic climate it wants to buy the retail assets only, dropping the manufacturing and export assets from the deal. 

A claw-back cause of the buyout which would have allowed Narula to raise his stake in Lilliput and grant him the chairmanship were also refused by L Capital.

“I will try and run the company as long as I can, but I will not compromise on the valuation,” said Narula, who owns 55 per cent of Lilliput.

Due to its debt burden, Lilliput shut down 25 of 62 large format stores, mothballed four of its six factories, trimmed salaries by 10 to 40 per cent and dismissed 10,000 staff. Lilliput, with more than Rs700 crore (about US$150 million) debt, will now undergo corporate debt restructuring.

Narula has been in dispute with Lilliput private equity investors Bain Capital and TPG over financial discrepancies. The dispute is now subject to arbitration.


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