The Hindu Business Line : CESC to seek shareholders' nod in subsidiary merger

CALCUTTA Electric Supply Corporation (CESC), the flagship company of the RPG group, has convened an EGM on April 21 to seek the approval of its shareholders for the proposed scheme of merging two of its wholly-owned subsidiary companies with itself.

The EGM, which is to be held under the directive of the Calcutta High Court, will place before the shareholders the merger proposal involving Balagarh Power Company Ltd (BPCL) and CESCON.

The BPCL was floated by CESC four years ago to implement a new 500 MW thermal power project at Balagarh in Hooghly district in West Bengal. While this unit was put on the backburner during the last few years when the company was in the red, indications are that this was not CESC's favoured location for a new unit that it is planning to set up now. However BPCL has already spent a substantial sum in acquiring and developing land at the site.

CESCON is the consultancy arm of CESC, which has been witnessing a dip in its business. The merger move is seen by analysts as an effort towards consolidation of CESC's operations.

The company was also seeking shareholders' nod for mortgaging its movable properties in order to secure term loans and debentures.

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