The Hindu Business Line : To seek shareholders' nod for scheme of arrangement

KHAITAN Electricals Ltd (KEL) has convened a general meeting of its shareholders on May 8 here to seek their approval for the proposed scheme of arrangement with Khaitan India Ltd (KIL) and Khaitan Lefin Ltd (KLL).

The decision follows a directive by the Andhra Pradesh High Court asking the company to get the shareholders nod, which was recently approved by the company's board.

Khaitan Electricals manufactures electrical fans and allied products. Khaitan Lefin is engagedin the business of investment and dealing in shares and securities while Khaitan India is into marketing of electrical products manufactured by KEL and also sugar production.

KIL also owns shares in KEL and KLL as investments. While KEL and KIL are listed entities, KLL is a closely held company.

At the end of March 31, 2003, the net worth of KEL stood at Rs 40.47 crore, KIL Rs 67.06 crore and KLL amounted to Rs 7.87 crore.

According to the KLL management, the proposed arrangement would enable the company expand its business with an established investment division of KEL. Further, the scheme of arrangement would ensure cancellation of equity shares standing as cross-holdings within these three companies.

Following the arrangement, the paid-up equity of KIL would stand reduced to Rs 4.75 crore from the existing level of Rs 8.7 crore by cancellation of 39.5 lakh equity shares of Rs 10 each. Of the shares to be cancelled, KEL holds 24.5 lakh shares and KLL holds 15 lakh shares.

The paid-up equity of KLL would get reduced to Rs 3.18 crore from the current level of Rs 5.5 crore by cancellation of 23.3 lakh shares of Rs 10 each. Of this, KEL holds 13.85 lakh shares and KIL holds 9.34 lakh shares.

In the case of KEL, the paid-up equity would be reduced to Rs 7.2 crore from the present level of Rs 9.7 crore by cancellation of 25 lakh shares of Rs 10 each. Of these shares, KLL holds 10 lakh shares and the balance 15-lakh shares are held by KIL.

In view of cancellation of shares as per the scheme of arrangement, the holding of KEL promoters would come down to 43.2 per cent from the existing level of 57.83 per cent. However, as there is no cancellation of shares on the reduced capital in their segments, the holding of non-promoters would go up to 10.1 per cent from the current level of 7.5 per cent and that of others, including the Indian public, would increase to 46.69 per cent from the existing level of 34.65 per cent.

More Stories on : Restructuring | Electrical Goods

Article E-Mail :: Comment :: Syndication :: Printer Friendly Page