The Inditex group has stated that Trent, its local partner, has the option to sell its entire holding in their two joint ventures, which operate Massimo Dutti and Zara stores in India.
The Spanish group declared in its most recent annual report that it had a call option to purchase a 35 per cent share in Inditex Trent Retail and a 49 per cent share in Massimo Dutti India from Trent, a division of the Tata Group.
Inditex stated in the report that the strike price is determined by taking into account the non-controlling shareholder’s portion of the investee’s equity at the time the call option is executed. There was no deadline for exercising the options.
This year, the fast fashion retailer, which currently operates three Massimo Dutti stores and 23 Zara stores in India, directly registered its first totally owned businesses in the country – Zara Home and Bershka Retail.
As per their agreement, Inditex’s joint venture companies with Trent are required to purchase goods exclusively from the Inditex Group; the Spanish corporation even has the authority to choose the product and its associated specifications.
Trent has consistently referred to its position as an investment. Trent said in February of this year that it will sell a roughly 29 per cent share in its joint venture, which operates Massimo Dutti, for Rs. 20.75 crore (US $ 2.43 million). For Rs. 105.08 crore (US $ 12.31 million), it sold a 14.06 per cent stake in the Zara JV last year.
