Key Quantitative Figures

  • Proposed funding arrangement of up to ₹5,00,00,000 (Rupees Five Crore only)
  • MOU validity period: Three months from effective date (19th October, 2026)
  • Confidentiality obligations survive for three years after MOU termination

Dates and Timeline

  • MOU execution date: 19th October, 2026
  • Effective Date: 19th October, 2026
  • MOU validity: Three months from Effective Date (until approximately 19th January, 2027)
  • Digital signature dates: 19th October, 2026 at 16:38:34 +05'30' (Brijesh Devrajbhai Patel) and 16:27:06 +05'30' (Poonam Kishor Shah)

Parties Involved

Mideast Portfolio Management Limited (First Party)

  • Listed on: BSE Limited
  • Representative: Poonam Kishor Shah, Director Finance

Cher Lifestyle Private Limited (Second Party)

  • Representative: Jalpa Brijesh Patel, Director

Purpose and Rationale

The MOU establishes a framework to evaluate a strategic association for business expansion of Cher Lifestyle Private Limited, specifically for establishing three additional branches in different cities. The proposed funding of ₹5 crore is intended to support branch establishment, fit-out, lease deposits, recruitment, training, technology, marketing, pre-operative expenses, and initial working capital.

Funding Structure Details

The proposed funding may be arranged through multiple modes:

  • Fresh issue of equity shares or other permitted securities by Mideast
  • Borrowings or other permissible sources of funds available to Mideast
  • Equity investment, loan or other permissible funding directly into Cher Lifestyle
  • Convertible debt, optionally or compulsorily convertible instruments
  • Combination of the above modes

The funding may be released in one or more tranches against agreed expansion plan milestones and utilization requirements.

Conversion Mechanism

  • Loan or other eligible funding may be converted wholly or partly into equity shares of Cher Lifestyle
  • Conversion based on mutually agreed business valuation determined through independent valuation by qualified professional
  • Valuation factors include existing operations, turnover, profitability, financial position, future prospects, expansion plans, projected cash flows, existing shareholding, capital structure, liabilities, and contingent liabilities
  • Conversion subject to Companies Act, 2013, private placement rules, valuation requirements, articles of association, and requisite Board and shareholder approvals

Conditions Precedent

The transaction is subject to multiple conditions:

  • Completion of satisfactory due diligence
  • Financial feasibility assessment
  • Approval by competent authorities of both companies (Board of Directors, Audit Committee, shareholders where applicable)
  • Execution of definitive agreements
  • Receipt of necessary regulatory approvals
  • Compliance with applicable laws including Companies Act, 2013 and SEBI regulations

Governance Arrangements

The MOU provides for consideration of:

  • Reciprocal board representation with at least one nominee director from each party on the other's Board
  • Strategic guidance and business development support
  • Periodic management information including quarterly financial statements, branch-wise performance, cash-flow reports, and material business developments
  • Governance arrangements and reserved matters for significant business decisions

Due Diligence Requirements

Mideast shall be entitled to conduct due diligence covering:

  • Corporate records and statutory filings
  • Audited financial statements, management accounts, tax returns
  • Existing borrowings, securities, guarantees, litigation, contingent liabilities
  • Shareholding pattern, beneficial ownership, related-party transactions
  • Business operations, customer relationships, licenses, intellectual property
  • Feasibility of three-branch expansion and projected financials

Definitive Agreements contemplated

Parties may enter into one or more definitive agreements including:

  • Investment or share subscription agreement
  • Loan or convertible funding agreement
  • Shareholders' agreement
  • Shareholders' rights and governance agreement
  • Board nomination arrangements

Financial Impact Disclosure

The MOU explicitly states that it does not constitute an unconditional commitment by Mideast to provide or arrange the proposed funding. Financial impact will be determined only upon execution of definitive agreements and completion of all conditions precedent. No financial impact is quantified in the current disclosure.

Key Limitations and Non-binding Nature

The MOU is largely non-binding except for specific provisions (confidentiality, costs, public announcements, governing law, dispute resolution). It specifically states that it does not constitute:

  • Unconditional commitment to provide ₹5 crore or any amount
  • Binding obligation to subscribe to or issue shares
  • Creation of partnership, joint venture, or agency relationship
  • Automatic grant of board representation or management control

Termination Provisions

MOU may be terminated:

  • By either party with 15 days' prior written notice
  • Immediately for material breach, fraud, concealment, unlawful status, unsatisfactory due diligence, or refusal of approvals
  • Automatic expiry after three months if definitive agreements not executed

#Tags: #MideastPortfolioManagement #CherLifestyle #StrategicAssociation #SEBIDisclosure #RegulatoryCompliance #FundingArrangement #Neutral