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Tuesday, May 20, 2003

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Dabur seeks court nod for pharma demerger

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DABUR India Ltd today filed its scheme of demerger with the Delhi High Court for approval. The company expects the entire demerger process to be completed by October this year.

At its board meeting last week, the company's directors had approved a swap ratio of 1:2 — one pharma share for every two Dabur India shares held — for the demerged pharma and fast moving consumer goods (FMCG) entities.

As part of the demerger, the company proposes to transfer assets of Rs 214 crore connected to the pharma business, out of the total asset base of Rs 521 crore, to Dabur Pharma Ltd, a company release issued here today said. Once approved, it also proposes to list Dabur Pharma Ltd on the stock exchanges.

The demerger process would require the company to seek approvals from its creditors (both secured and unsecured) and shareholders and this information would be provided to the court for a decision. According to the company, Dabur has already got clearances from some of its secured creditors that include: HDFC Bank, Punjab National Bank, SBI, United Bank of India and IDBI Bank.

Dabur had initiated its demerger exercise in January this year after the board agreed `in-principle' to hive off the pharma business of Dabur India into a new company. Ernst & Young had been appointed as advisors to suggest the scheme for demerger and help with its implementation.

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